Best e-commerce platforms for software publishers, 2020 review
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.
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 Jan-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 and help them sell their software online.
They take out the legal, technical and compliance complexities from the software authors and they provide a complete solution for a predefined 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).
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. A merchant service typically expects that you calculate and define the VAT and tax amounts.
They comply with the laws of the countries of the buyers.
- Less accounting for you:
The merchant of record will 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 to each buyer.
- 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.
- Refunds and chargebacks without extra cost:
They perform any refunds or chargebacks without additional cost. A 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
- 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 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.
- Marketing and international 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.
- Software ordering web pages / eShop:
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 order forms in many languages.
They should support multiple currencies so that the customers are charged in their local currency.
- Debit card for fund withdrawals and payments to other services and goods:
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 as a normal bank account and make purchases from where ever the debit card is accepted.
For example, you can use your account's funds to pay for your Google Adwords advertising. Google Adwords does not accept PayPal as a payment method and the 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 invoicing, bookkeeping every order, dealing with complex taxation across counties, and isolate your self from the compliance with the commercial law.
- You can sell your software from more than one Merchant platforms. E.g. Apple Store for the MacOS version of your application, Microsoft for the Windows version of your application, and another one for direct sales from your website.
- For your main an 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).
- Accepts PayPal payments (to cover customers who have a PayPal balance and want to spend that money).
- 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.