A Quick Step by Step Guide on How do you sell an App

Published on: 18/02/2022 | Updated on: October 25, 2024

How do you sell an app if it’s your first app? Many people have dreams of developing and selling an app that goes on to become wildly successful. Getting there is often hard work as you need to develop the app, get it noticed, get the right valuation and investors on board, and then sell the app. This guide will detail the steps you need to take to not only ensure your app can attract the right buyers but that you also get the right price for the app. Let’s check the step-by-step guide on how do you sell an app.

Develop and Test

It is obvious that you need to develop and test an app before you sell it, but things aren’t always that simple. Buyers are looking for an app that is well-developed and that does not have any bugs in it. If you are the app’s developer, it is easy to ensure the app is developed to the highest standards and that it contains no bugs. However, if your app is being developed by a third party, you need to take the extra step of having the app tested thoroughly.

Some developers and services can help with this, and there is also no shortage of freelancers and users who will sign an NDA to test the app for you. Every buyer wants an app that just works without them having to go in and do a lot of refactoring and additional coding to ensure the app is of the highest calibre.

A well-developed app is incredibly valuable for buyers who want to integrate the app’s functionality into products and services they already use. For example, if a financial business wants to incorporate some of your app’s functionality into their banking app, they need to know the code is not only well-written but also secure and well-tested for security vulnerabilities.

Collect Data About the App

While it is possible to sell an unlisted app, doing so limits the amount of money you can make on the app. At the most, you are likely to get back what you have invested in the app plus a little more, which becomes your profit. However, if you are looking to sell an app for a desirable price, you need to get it listed and start collecting data on the app.

One critical metric for buyers is the number of downloads and active users the app has. Downloads indicate that there is an interest in your app and the niche it belongs to. The number of active users indicates that the people who have downloaded the app like it enough to use it regularly. This is the main reason why you will see a lot of social media companies posting data on their daily or monthly users, as well as data on active users during these periods.

You also need to collect financial data about the app, especially if the app is selling a product or making money in other ways. Investors and buyers want to know they can recoup their investment by making enough money on the app. Additionally, an app that is already making some money is easier to scale revenue-wise than one that is not making any money.

You also need to collect data on ad spend if you are marketing the app in some way. If your app mainly relies on paid ads and traffic for marketing and downloads, that could be a liability for a buyer, and they therefore need to have this data. Conversely, an app that sells ad space can be very valuable to the right investor. The reason is that selling this ad space is an additional source of income for whoever ends up owning the app.

Get a Valuation

You might have an idea of how much you want to sell the app for, but the final number will be determined by the market. Every app is different, and the valuation is done depending on your app type and several other criteria.

These include how the app makes money, what value it provides to the buyer and its users, and whether there are similar apps in the market. Much of your valuation will depend on your ability to prove what you say about revenues, long-term profitability and growth backed by the documentation you can produce.

Should You Sell Your App?

Once you have the valuation, think about whether you should sell the app. One important thing is to think about the profitability of the app. You are likely to get a very high valuation if the app is highly profitable. However, if you can ensure the app continues to grow, you can sell it later for the same valuation or at an even higher valuation.

For example, if you have a highly successful app that makes £2000 in monthly profit and is valued at about £60,000, you could hold on, take the £12,000 profit for six months and still sell the app for the initial valuation or even higher.

Find Buyers

When it comes time to sell your app, there are two main types of buyers to consider: individuals including companies, and marketplaces. Individual buyers are often either investors looking to buy an app or tech companies that are looking to buy your app.

In either case, you need to know how to find these clients. An online search is usually enough to know who is buying, and how to pitch your app to them. Since you have all the documentation, understand the niche, and know where your app fits, putting together a pitch should not be too hard.

Marketplaces are more open and are seen as the easier way to sell an app. Researching the available marketplaces should tell you their pros and cons so you can pick one that is right for your type of app. If you can, try to get on marketplaces that have auctions.

Although the starting price can be low for many apps, the final price can be quite high if you have the right app, i.e., one that is doing well and that fits the criteria we have discussed above.

Businesses and investors are always looking for apps to buy. That could be so they grow them or so they use their unique functionality in their platforms. Whatever the case may be, having the right documentation, knowing how much your app is worth, and knowing which type of buyer to target and market to are crucial if you want to sell your first app fast and at the desired price. This was the step-by-step guide on how do you sell an app.