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Ready for Retail? Get Your App on the Map : Page 4

You've had the great idea, written the perfect software, tested it, revised it, debugged it, put it on the Web, and people are downloading it like hotcakes. But where's the money? The real money's on retail store shelves—and you can't get in easily. Find out what the experts say about how to get your commercial applications into retail chains.


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Raking in the Cash
There are plenty of unseen ways that the publishing model saves headaches for software manufacturers. For example, each retailer has strict policies and requirements for invoicing and supply chain concerns. Getting to compliance on any one of those systems is a non-trivial task. Getting to compliance on all of them is potentially nightmarish.

The investment needed to get a product into just one store, says Seeyle, is at least $100,000 and that's just for the cost of goods. Whether you ever see a return is another matter—retailers won't pay you until the consumers pay them. And you'll be expected to take return delivery on all unsold inventory.

A publisher will give you the inside information—the little retail tricks and cheats—that will help you maximize your earning power. For example, breaking the product up into a regular and deluxe version can increase sales. Similarly, freshening up the box can give already successful products an interim sales boost.

So how much of your booty do you have to kick down to the partner? It's a chunk. Chapman says if you use the model where you, the manufacturer, pay the manufacturing costs, you can expect to keep 50 to 75 percent of the net revenue. However, if you choose a partner who fronts your expenses, your take drops to somewhere between 10 and 25 percent of net revenue. And with some of the big distributors, such as EA, Chapman points out, you also lose your marketing identity, as your products will be branded under their imprint.

But that doesn't mean you won't make money. A strong product, such as Tenebril Software's GhostSurf Pro, will sell 17,000 to 20,000 units per month, which has earned its two-person staff about $2 million so far.

Success, of course, is not guaranteed, even with the help of a distributor. But your chances of losing money are certainly minimized. Publishers plan carefully to ensure they'll at least break even. That means selling at least 50,000 units in the first year.

But if all goes well, and enough Iowans on their lunch hours just happen to be intrigued by the fancy box and the bullet points on the back, promising just the right thing at just the right time, the next time you go shopping you'll be the one hearing phantom cash register bells.



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