Monthly Report January 2012

This article was originally posted at on the 2nd February 2012

Welcome to my income report for january 2012. Today I’m gonna tell you what happened in the last weeks and show you some sales-figures that might motivate you, just like I did for the last month.

I will also try to answer some questions that arose regarding my last report. The feedback was enormous and many people took the opportunity to ask me questions via the comments-section. Even though I answered all of them, some of you might have missed the information in there. So here are some of the frequently asked questions from the comments:

What type of grant did you receive?
I received what we here in germany call “Gründerzuschuss”. It can be considered a start-up grant. Normally, this is meant for unemployed people to help them end their unemployment by getting self-employed. So it applies to one person only. It is as high as the unemployment-fee that one would receive plus some 300 bucks for insurances. It lasts 9 months. My grant will end this month, but as you can see I already earn enough money to keep on going without the grant. So for me, it perfectly worked out.

Are people pissed off by kids-apps that display ad-banners?
I was very curious about that, too, when I started. What I can say now from my personal experience: 99% of the people are NOT. From all the 2.500 ratings that my animal puzzle has on Android, only FIVE even mentioned the ads:

  • Two people complained about adult ads being displayed, which of course is totally inappropriate for apps aiming at children and so their complaint is absolutely understandable.
  • Two other people were bothered about the ads in general and uninstalled the app
  • One person was THANKFUL that the ads were not placed inside the real game but only in the menus.

This refers to ads on Android. On iOS, noone mentioned the ads. They get removed once you unlock the full version, so I think many people did not even witness them. They either like the game and buy it or delete it again. So as you can see, people seem to be really used to ads.

How do you handle all the tax-stuff?
First of all, NEVER trust any information you find on a forum or in the internet in general. With this said, you might skip this answer :D

I only can advise you to contact a tax-consultant. They should know their stuff. Of course it costs money, but in my case, my consultant agreed to offer me some startup-help and charge me some special-fee until I start earning real money. It is also an investment for them if this happens to become a long-term relationship.

What I can say nonetheless is that here in germany (and I bet in most other counties, too :)), you always have to pay income-tax at the end of the year. Then there is the sales-tax that you normally add to an article when selling it to a customer. In germany, its 19% of the price and goes directly to the tax-office every month or every year, according to what type of company you are running.
Now as far as I know, the appstore handles all that sales-tax stuff for you and they pay the sales taxes themselves. So what you get from them is your income, so you only need to pay income tax for that. Google is not that kind. You need to handle all sales-tax stuff for yourself. According to in which countries you sell your apps, this can get quite tricky. It’s the main reason why all of my android apps are free. Money from advertising is yet another story. So as I said: better to ask a tax-consultant :)


So here are now my revenues for January 2012

Ads income

iOS: $184 (+ $112)

Android: $989 (+ $387)

Appstore Sales

iOS: $6.937 (+ $3.171)

Apps separately

Apps combined

As you can see, there are days where I make $300 a day! Now that’s insane.

Total: $8.110 (+ $3.671)

That is surely some crazy ammount of money. Even if I deduct 25% of it to save for income tax at the end of the year and pay all my bills for this month, I still got some money to spare. Seems like quitting my job was one of the best decisions I ever made.

How come I more than doubled my income? There are mainly two reasons:

  • After comparing my puzzle-games to their competitors I realized that other people charge WAY more for kids apps. So I chose price Tier 2 for ALL of my inapp-purchases. People don’t seem to bother since downloads were not affected at all. And I’m still cheaper than many of my competitors.
  • Android Apps really took off. After the clue with the “rate to unlock” feature, my ratings and with them my downloads really increased, which led to a remarkable revenue-increase coming from the ads.

I also assume that regular updates (mostly bugfixes, seldom new features) keep your apps visible. The peaks you see in the sales-curve are weekends on the one side and days after updates on the other.

Plus, I try to answer every support-question within 24h. I think that prevents people from blaming me for a disfunctional app in their ratings-texts. Few still blame me, but the vast majority of users seem to really love my apps. What else can I ask?

There is however one downside to that “adult ads” story. I immediately communicated with the ad-network after users complained about the adult ads. I already ensured in the past that filters are setup so that no adult ad can slip into my apps. But somehow the filters were not configured correctly by my ad-provider. So I restricted everything that was not suitable for children by myself: ads for alcohol, tabaco, dating apps, eCommerce, business and so on. After that, my ad fillrate dropped to < 1%, and so did my ad revenue at the end of january. Seemed like nearly all ads are targeted at adults. I changed to another ad-network to see if they provide better fillrate and revenue for child-friendly apps. You will read about my experience with them in the next post!

Now one can say that two out of 2.500 users complaining is not a reason to pass $1.000 a month from ad revenue. But for me, it’s a question of principle. I would not sleep well if I knew my apps that are designed for children display inappropriate ads. Full Stop.
If revenue from the new provider is still as bad, I will find new ways of monetizing :)

So, thanks for reading. I hope I could inspire and motivate you once again. As always, feel free to ask your questions in the comments section of this post!

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