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What I learned making $60k on AppSumo

Everything started around a year ago when I was working as a freelancer. My pdf flip maker was a side-project getting some traction but not earning enough to leave my job.

I read everything about AppSumo, and I finally decided to assume the risk; after 15 months running the LTD, I earned a total of $60k net revenue ($80k without the share rev cut). It's an average of $4k per month in the range of $2k-$6k.

I’m now working full-time on my SaaS and earning what it took one year of freelancing in two months. For me there wasn’t a big day I ran home to hug my family screaming how I made it, it was a gradual change with a lot of small days of happiness and disbelief.
AppSumo was a small factor in it all, but it helped a lot at the start, so I decided to explain everything I learned running my AppSumo Marketplace Deal.

AppSumo sales

Marketplace Lifetime Deals

After contacting AppSumo, they told me I could get listed on the Marketplace Deals, but not the Select Deals. The main difference with Select, is you are supposed to drive all the visits to your deal’s page, and they don’t make the promo video, but you get 70% of the revenue instead of the typical 30%.

Although it was disappointing thinking nobody would see it, I was lucky in perspective, and I think it’s the best option.

What worried me the most?

Driving traffic to AppSumo

It was my first concern. On the onboarding, you will read you must drive traffic to the deal repeatedly. Yes, you will probably sell way more, but you don’t have to. I sent zero traffic to the deal’s page, nothing, nada. And yet it worked well from the first week.

I found AppSumo ads with my service from time to time on Instagram and Facebook. And even if they didn't, their huge user base is more than enough to make money.

AppSumo Instagram ad

Expected sales

The sales are pretty stable, but it’s a black box and you can’t do much. Depending on whatever parameters they have, one day, you will show up on the first positions of the listing, and the next, you are not showing up at all. But it averages somehow.

Then they also run campaigns that can make a difference. There are big spikes when they promote you on the newsletter, on the summer and Balck Friday offers, or when you close the deal.

AppSumo monthly sales

Support costs

With the typical Select Deal, you get thousands of hundreds of dollars in a few weeks, but this comes with enormous support pressure, you lose a lot of control, and it can be risky because when you decide to close the deal, you might have too many customers in.

That is not the case with Marketplace Deals. I got one or two support requests per day, maybe a few more in the first weeks, until I answered the most common things on the question page.

It’s good to go slow, earn less, and have no pressure when there is a risk. That’s the main reason why I would never run a bigger LTD campaign.

support cost

Server costs

Server costs are usually not a problem for most SAAS, but of course, it depends on the service. For me, it's mainly data transfer and disk storage, so I tracked the cost per user.

In my case, I would need the service running for over 70 years to start losing money from LTD users. It’s vital to have long-term plans, but not that much after death.

server cost

Subscription cannibalization

Another of my main concerns was how many customers could have been subscriptions. The great thing is AppSumo pays you 95% when your service is the first purchase of a user. So you can guess they knew AppSumo because of you, so you can track the subscriptions you lost.

It’s around 14% on my case, and I kept an eye on it every month to see if it was worth it, considering the customer’s LTV.

That’s a lot lower than I expected, given that AppSumo usually shows up on the first page when people search for your service. Most people tend not to trust this kind of site unless they know them from word of mouth. I often got support requests asking if it was legit.

What kind of customers will I get?

You get many customers who barely use the service. They buy, thinking it might be helpful for them in the future but end up not needing or forgetting about the service. And you get a few power users that will use the service a lot.

For heyzine, 1% of the customers cost more than 50% of the total LTD costs:
customer cost

The fact that AppSumo customers know you are a small startup makes them very supportive, and you get a lot of excellent messages and feedback from them.

I see no difference in feature requests compared to free and subscription users. People on every plan ask a lot of weird things, and it's up to you to know if it could be helpful for a large enough amount of users.

Price-sensitivity

It doesn’t matter how good the deal is; they frankly are price sensitive and will ask you to add features from higher plans many times. I think it's essential to have a good strategy about the pricing tiers and stick to it to make sure it doesn’t affect the subscription tiers.

Upselling to AppSumo customers is usually a bad idea. You have to offer a genuinely good deal. If they see too many upsells in the UI or emails, they are gonna complain in the reviews. It's better to have them on a middle plan and upgrade to a subscription when they ask for it.

Refunds

The refund rate was 16%. It’s incredibly high compared to the subscription churn rate, so I started asking for every refund and most of them just didn’t need the service or expected a totally different thing. I contacted AppSumo and was told their overall average refund rate on the platform is 17%.

I guess the customer price sensitivity combined with impulsive buying causes this. And there isn’t much to do besides contacting and trying to help find the value.

Recommendations

Avoid being dependent on the AppSumo revenue

I think most of the risk of LTDs is somewhat psychological. Many services are offering them, and when they close the deal without another channel, they stop growing, so they launch again and again to keep going. Then it’s not a sustainable SaaS anymore.

You need to avoid dependence on AppSumo, so you either have another good revenue channel or are prepared to close the deal anytime, knowing you can support the future costs of lifetime customers.

I was lucky it was easy for me because it started representing 40% of the revenue and ended up being less than 15%. It can go wrong, but being careful and tracking everything helps a lot.

Some strategies

If you go with it for a few months, make sure you have it running in July or November. They offer a 10% discount (from the gross price, so it costs you 7%) on a Summer promo and Black Friday, where you will sell between x2 to x4 more.

When closing the deal, you can choose to set up a counter with the hours remaining that creates a lot of FOMO and you get way more visibility. Close the deal in the middle of the week. It's when AppSumo has more visits and you can get a month of sales in a single day.

Reviews are what Sumolings check right after the title. So always ask for reviews after you help a customer. They somehow feel in debt with you, and they send good reviews that will be important when someone leaves a bad one. I think it helps with the position on the listings too.

If possible, offer two or three AppSumo codes for additional features on the same plan for the not-so-price-sensitive customers.

And that’s all!

Good luck if you decide to go ahead with a lifetime deal! If I can help you with my experience or have any questions, here I am.

And if you found it interesting, I’m building in public on Twitter:

  1. 4

    Thanks for sharing! I published my saas there a few months ago but still zero sales. I really panicked about offering a “life time deal” so I only offered yearly deals.

    Maybe that explains why the zero sales :s

    1. 2

      For context, we got 1500+ sales in 3 months when we put my SaaS on AppSumo as an LTD. After that, we put it on there as a discounted 1 year deal and have had 2 sales in 2 years. The audience there is definitely focused on lifetime deals.

    2. 1

      That’s been my experience with running yearly deals on AppSumo as well. Seems like regular AppSumo users are mostly interested in lifetime deals, so it’s really only worthwhile if you think you can use those to get a cash infusion without committing yourself to an unsustainable long-term resource drain.

      1. 1

        My main concern is that, as an Indie Hacker, this is just a project that I’m trying to build so I don’t feel comfortable enough committing to it “for life”.

        I’d really love to make it and success with my product, but what if I build another product that performs better so I need to shut down this one?

        1. 1

          I feel what you mean, and sure you need to commit for the long term to your service, it's horrible to close it when you have hundreds of customers on lifetime deals. But the deal is for the service's life, not your life.

    3. 1

      That's interesting. I considered moving it to the yearly deals but finally decided to just close it to avoid confusion.

      AppSumo's popularity comes from LTDs, so I guess it makes sense that customers skip 1-year deals.

      LTDs are risky, that's for sure. But I think tracking everything and having the cold blood to close it when needed, they are a good option.

      1. 1

        Thank you for your response @mzrd!
        What do you mean by "close it when needed"? closing the deal or closing your product?

        1. 2

          I mean to keep an eye on how many customers you get on the LTD and all the costs.

          To close the LTD if things go wrong without affecting your product and making sure the LTD revenue is not essential to keep your service running.

    4. 0

      @Luctus, have you also promoted your deal of FB groups?
      being a tight community around a single topic, they tend to perform pretty well

      if your LTD offer is still on, you can check out this list with top FB groups you can reach out to

      1. 1

        Oh, thank you @danielpirciu for sharing that list. I haven't promoted the deal anywhere to be honest.

  2. 3

    In the article I did not see the main thing: after cooperating with Appsumo, the contract forbids you to cooperate with certain sites or you will have to pay a fine. Do you know what sites these are and how much time should pass after the deal is closed?

    1. 1

      With Select Deals, there is an exclusivity clause that forbids you from listing an LTD on any other site. I'm not sure because it wasn't my case, but I think it's during the campaign only. They spend a lot on Ads, and they need to be sure people are not buying anywhere else.

      There is no exclusivity clause with Marketplace Deals, in their own words from the Partnership Agreement:

      Marketplace deals are not bound by our exclusivity clause, you can list
      freely on other sites. If you move from Marketplace to a Select Deal, then
      there will be an exclusivity clause once you become Select.

    2. 1

      This comment was deleted 2 years ago.

  3. 2

    For Zlappo, subscription cannibalization turned out to be a bigger issue than I initially expected.

    I have users with active trials/even paid subs who eventually discover our LTD offer, and they insist on having the LTD being honored.

    Thus there's some MRR lost there.

    How do you combat this?

    1. 2

      I don't think you should fight it. Make sure that your LTD price is higher than your LTV. If you see in your metrics that the percentage of LTD customers over the total is starting to get too high, just close the LTD.

  4. 2

    Thanks for the post.
    One thing I want to point out is that their FB/IG ads are retargeting, so you see it solely because you visited that page.

    We are running 1 year deal $39 instead of $280(as subscription) and what they screwed up is they generated ad as it was LTD. I notified them, but I am not sure if they fixed it though. Not IG/FB user.

    1. 2

      Good point, thank you. Makes sense as I didn't see any difference in the average sales of first-time customers when I saw the ads.

      What a mess, hope you didn't get many angry customers about it. The truth is it feels like walking in the dark with some things like this. It would be way better with more information about when, how, and what ads they run.

  5. 2

    Nice writeup. Very useful to get a detailed review on running an Appsumo deal since it's something that I'm always pondering. I'm not sure if I'll go for it though.

    I've followed you on twitter and will be watching your progress going forward. Best of luck!

    1. 1

      It's always a difficult decision and the more information you have to make it the better. Thank you Gilli!

  6. 2

    Thank you for sharing your experience. This is the kind of content I came here for!

  7. 2

    Amazing post, thanks for sharing the details.

    1. 2

      Thank you! there are too few details on most articles about it, hope this helps.

  8. 2

    Thanks for sharing all of this. The best stuff I've read about LTDs so far 👏 good job!

    1. 1

      Thank you Ivan! proud you liked it!

      1. 1

        Thanks for sharing the post. Great success, congrats to the guy.
        However, I didn't take anything from that "case study". A guy posted his product on AppSumo and made money. Ok, cool. Good for him. But what should I take from that story? You mentioned FB Ads as well, but again I'm missing any learnings on how to replicate what he has done there.

        ps. I spent weeks researching this field and talking to people before running our LTD campaign. I plan to share our learnings soon.

        ps.2 I didn't mean to encourage you to create good content. I just wanted to provide my constructive feedback. Hope you don't mind. Wish you the best.

        1. 3

          I think this paragraph sums it up pretty well

          So his Growth Strategy is to leverage top trends and build the distribution around an LTD offer. To increase the AOV he upsells them to higher tiers. To get them back and retain them on the platform he sends product updates. And to keep them engaged he is building an active community on Facebook Groups.

          so his success has to do with taking advantage of a trending niche fast, then launching the LTD, and finally building a community and keeping them engaged

          I don't think it has anything to do with the LTD itself, it has to do with good timing + community building, this would be my main takeaway

  9. 1

    If you don’t have many subscription tiers, how to avoid pricing appsumo lower than your annual amount? Or is creating some sort of “mid” tier basically a requirement for making appsumo work, in your eyes?

  10. 1

    Thanks for Sharing this Albert. Especially the refund rate

    I just have a couple of weeks of Appsumo revenue right now.

    It's been a great source of getting initial customer base - hopefully we'll find a channel that lets us get to subscription revenue.

  11. 1

    Helpful. Thanks for sharing.

  12. 1

    Thanks a lot for sharing Albert, great read.

  13. 1

    @mzrd, you've mentioned 68K in total and your cut was 60K, basically, Appsumo only took 12%?

    I know that for Marketplace deals they still charge 30%, did you manage to negotiate with them?

    1. 2

      Thank you for pointing this out! The calc was wrong, I've just edited the post.

      They got 20k, so it's a 25% cut.

      I didn't negotiate, but there are a couple of things that lower it a little:

      • First three months they charge 10% instead of 30%
      • When your deal is the first purchase of a customer they charge 5% instead of the 30%

      Thank you!

  14. 1

    Very insightful post & congratulations 👏

    1. 1

      Thank you, Alok!

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