Ε-commerce platforms for software publishers
As a software developer, do you know which feature of your software your users appreciate the most?
We developed SofMeter, the free in-app analytics tool, to answer questions like that.
With SoftMeter you will see how the users are using your software, discover which features are used the most or least, and understand where you should focus your development efforts to maximize your sales.
Review: 12 best e-commerce platforms for selling software online.
Software developers should review every few years the different ways to handle the selling of their software (and also other digital products or services).
We are doing this exercise for our own software sales (for our SoftMeter library) and publishing our findings here for other developers to also benefit from them.
This is a hand-picked shortlist (Updated Mar-2020) of the most popular e-commerce platforms specialized to support software sales for B2B or B2C.
These E-Commerce solutions for small, medium and big software publishers, can be used even by indie software developers to enable them to sell their software online.
They take out the legal, accounting, technical and compliance complexities from the software authors and they provide a complete solution for a predefined, very reasonable, service fee.
They sell globally and operate as "Merchant of Record" (except PayPal and Stripe which are included for comparison purposes because they are very popular).
What is a "Merchant of Record"?
A Merchant of Record, resells your software to the clients and becomes a buffer between you and the buying customer. The receipt or the invoice that the client receives is issued under the Merchant's company name.
You, as the developer, you are whole-selling your software to them and they act as your reseller/global distributor.
Why you should use a seller who is a "merchant of record"
There are important benefits of using a global reseller for software products instead of selling directly to the customers.
- VAT and taxes:
They take care of the VAT and taxes regulations for the different countries around the world. They also give the collected VAT to the involved countries.
Otherwise, if you are using a typical merchant service you must calculate and define the VAT and tax amounts yourself.
They comply with the laws of the countries of the buyers. No need (nor risk for mistakes) for you to know and calculate the different national taxes and give back the collected taxes to the different countries/states. The reseller does this for you. Quiz: Do you know the percentage of the "Consumption tax" for online sales to Japanese customers?
- Less accounting for you:
The merchant of record will (in most cases) send you one statement per month, summarizing the sales, their fees and the net profit for you. You have to file in your financial books only one statement per month, instead of filing all the transactions (+tax, +VAT, +refunds, +refund card fees) of all your buyers.
So by using a Merchant of Record reseller, it is like you outsource your sales accounting and reduce it to only 12 statements/invoices per month.
- Simple fee structure:
They charge an all-inclusive predefined service fee, usually based only on the transaction amount.
A simple merchant service might charge different fees depending on the country of the buyer and the method of payment.
- Refunds and chargebacks without extra cost:
They perform any refunds or chargebacks without additional cost. Otherwise, a typical merchant service might charge up to $15 for a manual chargeback.
- International customer support:
They operate a customer support desk for the ordering and payment process (but not for technical support to your software; that is handled directly from you).
Why you should use a reseller specialized in software online sales
- Better checkout user experience:
The checkout user experience is tailored to software sales which is a bit different than the sales of physical goods.
- License management:
They usually offer an SDK that you can use in your software to check if a license or a subscription is active. Depending on the result, you can automatically unlock the PRO features of your software.
- In-app purchases:
They usually offer an in-app purchase SDK. Your users will be able to buy a license from within your software. This convenience increases the conversion rate.
- Inclusion in ready software marketplaces
They usually have their online marketplace of software, where your software will also be added and gain some extra exposure to the visitors of the marketplace. E.g. Apple store, Microsoft store, ComponentSource, Gumroad, etc).
In this case, one parameter you should check is whether they pass the customer details to you or not. For example, Apple Store does not give the customer details to the software vendor, but just reports the number of sales.
- Affiliate marketing and network of resellers:
They usually operate an affiliate network that you can use to increase your sales (affiliates are site owners who want to recommend software to their visitors. For each sale originating on the affiliate website they get a predefined commission from the total price). This way, you benefit from the marketing effort of others.
Other features to look for when selecting your online selling platform
- Fraud protection:
They check for fraudulent transactions and block them before they are accepted.
- Design of checkout and order forms:
They maintain and run the checkout and order forms, keeping them perfectly designed and responsive to different screen sizes (you want your order form to look perfect so that the client does not get second thoughts)
- Localisation, multiple languages:
They have translated their order forms in many languages.
- Support for many currencies:
They should support multiple currencies so that the customers are charged in their local currency and they understand better the cost of your software.
- Issued debit card for fund withdrawals:
Some providers issue a debit card that is linked to your account balance. With the debit card (usually a MasterCard) you can use your account's balance to make purchases from any online or physical shop.
For example, you can use your account's funds to pay for your Web hosting, your annual Apple developer fee, or your Google Adwords advertising. Google Adwords does not accept PayPal as a payment method and such a debit card bypasses this barrier.
Conclusion / Recommendation: How to choose an e-commerce provider for your software products.
- Chose a "merchant of record" so that
- you do not have to deal with the invoicing and the bookkeeping of every order,
- outsource the calculation and application of complex taxation across counties, and
- isolate yourself from the compliance burden with each national commercial law.
- You can sell your software from multiple merchant platforms.
- To benefit from the ready marketplaces, use Apple Store for the MacOS version of your application and Microsoft for the Windows version of your application.
- To avoid the high fees of the marketplaces use another merchant platform for the direct sales from your website.
- For your main e-commerce provider chose one who:
- Is specialized in software sales.
- Has an affiliate network (so that other individuals or websites can also market, promote, review, recommend your software, for free).
Tip: Auto-signup every paying customer as an affiliate. They know your software well and decided to pay for it. They are your best ambassadors so give them a commission if they bring more customers.
- Accepts PayPal payments (to cover customers who have a PayPal balance and want to spend that money).
- If you are a new seller and you do not have enough traffic volume on your website, select a provider that has a market place and resells your software for you. This way you will benefit from the provider's user traffic and improve the discoverability of your software.
- If you have a high volume of sales or your software licenses are based on subscriptions select a provider who:
- Has a subscription SDK or API so that everything is done automatically and you can spend your time on other, more creative tasks.
- If you have a MacOS application:
- Add it to the Apple Store to benefit from the high traffic of users who are ready to buy software. This will also increase the discoverability of your software.
- Sell it also outside the Apple store, via an e-commerce provider like the ones listed below. This way you will make sales directly from your website or via the affiliate network and avoid the 30% charges of the Apple store.
- If you are an independent developer and you want to sell your software under your "doing business as" (DBA) name, instead of exposing your personal name, then have a look at PayPro Global.
List of selected e-commerce providers for software developers.
Below is a curated list of e-commerce providers together with their key features that you must consider when deciding how to sell your software online.
Additional alternative payment/e-commerce platforms in our review queue
- Selz (link)
- integrates with Google Smart Shopping
- provides website
2,9% + 2% + $0.30 per sale
$29/month (cheapest plan)
- No merchant affiliates yet
- Has API
- Has basic license keys functionality (Auto, From list, From URL)
- For indie games
- Offers also digital delivery
- Send owl
- Total sales: $42'000/000
- Based in UK/London
- Has basic license keys functionality (Auto, From list, From URL)
- Has affiliate network
$15 /month + Your payment gateway fees
- Not a "merchant of record"
- Fees: 5% per sale
- Network of 800'000 affiliates
- No SDK
- Has a marketplace of software titles
- Google Smart Shopping campaigns
- Not specialized in software sales