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26 October, 2021

11 mins

What Is An App Marketplace?

What is an App Marketplace?

Take a moment and think about the hardware, services, and platforms that we use today. They all have core features that you use every day, whether that’s the mail app on your smartphone, the CRM in Hubspot, or a store of Shopify. But that’s not where our use of these technologies ends. Each of them has an extended set of functionality powered by an app marketplace. An app marketplace is an ecosystem where developers build and distribute add-ons for a platform or service.

Launched in 2008, Apple’s App Store may be the app marketplace that everyone knows by name, but today, more than 300 different app stores are available for mobile devices alone. Today, there are app marketplaces for almost every major B2B SaaS platform, including Salesforce, Hubspot, and Slack. Even our smart TVs have app marketplaces to offer viewers an ever-growing array of streaming networks from around the world.

So what exactly is an app marketplace? While users see the storefront portion of an app marketplace, there is a deep set of tools, processes, and APIs underneath the surface. These ingredients power the consumer, developer, and platform experience of an app marketplace. We’re going to dig into the ins and outs of the modern app marketplace to give you the information you need to start your app marketplace project.

What are the Parts of an App Marketplace?

Before we get into examples and how they work, let’s talk about the parts that make up today’s app marketplaces. They’re digital evolutions of traditional brick-and-mortar stores, sharing many of the same concepts and building blocks. From managing inventory to product displays, there are numerous analogs between app marketplaces and retail stores. 

Every app marketplace functions differently, from what types of content they offer to pricing models. While the functionality may differ, there are three main components of an app marketplace.

Storefront

Storefront-what is an app marketplace

The storefront is where users discover and use or integrate content from an app marketplace. While each marketplace is unique to its platform and the content types that it hosts, there are a few standard features:

  • Search – the ability to search for content, whether that’s apps, configuration files, images, music, video, and more.
  • Promotion – a promotion section where selected content is displayed to end-users.
  • Recommendations – content recommendations powered by a marketplace team or a recommendation engine.
  • Content Listing – a dedicated listing for a content item in the app marketplace. A typical listing includes a description, images or video, reviews, and a rating system displaying content appropriateness for end users if applicable to the content.
  • Accounts – app marketplace accounts for users to store payment information (if the marketplace offers paid content) and keep a history of downloaded and purchased content.

Developer Portal

Dev portal-what is an app marketplace

Behind the hustle and bustle of the storefront is an equally dynamic developer portal. Building a thriving app marketplace can’t happen unless you have great content. The developer portal is where developers submit and manage their content, view reports on download and usage, and interact with a marketplace’s administrators. Developer portals include:

  • Accounts – similar to the storefront, developers create accounts to submit and manage apps.
  • App management – developer portals allow developers to submit new apps, app updates and manage app details, including screenshots, videos, descriptions, and other metadata.
  • Review management – developers can respond to content reviews from end-users in many developer portals. 
  • Payment setup and payout options – if the app marketplace offers paid content, developers can set pricing for their content and configure their payment method for their revenue share. 
  • Reporting – be able to generate reports on downloads, sales, and potentially usage if available.

Administrator Portal

Admin-what is an app marketplace

Tying the app marketplace experience together is an administrator portal. An administrator portal is a one-stop location for a platform owner to manage app listings and monitor the performance of the app marketplace. 

  • App management – manage the entire app lifecycle from submission, review, approval or rejection, and updates.
  • Marketplace management – enables app marketplace owners to promote content or collections of content to their end-users.
  • Developer management – approve and manage third-party developers, including payment management.
  • Reporting – Generate reports on sales, downloads, customers, and other app marketplace data.

Examples of App Marketplaces

Both consumer and B2B platforms use app marketplaces to extend the functionality of their platforms. When you think of an app marketplace, the first thing that often comes to mind are apps, but today’s app marketplaces support a growing array of content types. App marketplaces also provide platforms and third-party developers with new channels and revenue opportunities. 

Consumer app marketplaces

Ap store Mac-what is an app marketplace

The two leading app marketplaces are the app stores for the most used smartphone operating systems — the Apple App Store and the Google Play store. Both marketplaces offer apps, but Google Play offers music, movies, and television content, while Apple has chosen to keep that content in separate marketplaces. Apple also has app marketplaces for their Apple Watch and Apple TV platforms that use the same developer portal to manage content but present the content in app storefronts specific to those devices.

E-commerce App Marketplaces

Shopify

Ecommerce leaders, including Shopify and WooCommerce, use app marketplaces to create a thriving ecosystem of add-on applications that extend the functionality of their platforms. Worldwide e-commerce sales are projected to hit $4.2 trillion this year driven by consumers shopping from home more often due to the COVID-19 pandemic. Shopify and WooCommerce’s app marketplaces offer store owners apps that enable local delivery, SMS integrations, custom page builders, and product reviews. Store owners can even leave product reviews of the apps that expand product review functionality.

B2B SaaS Marketplaces

B2B

B2B platform tools including Slack, Hubspot, and others offer marketplaces for add-ins that customize those platforms for the unique needs of an organization or team. 

The Slack App Directory has integrations for mainstream tools such as Google Drive and Trello. The directory also includes specialized apps for tasks such as managing employee one-on-one meetings or adding a GIF to a chat. There’s also one of our favorite apps, Donut, which pairs up employees for coffee meetings to build employee culture. 

With the Hubspot App Marketplace, users can find more than just integrations — there are also templates and workflows available to customize and extend Hubspot’s core functionality.

What Content can you Distribute in an App Marketplace?

As we talked about in the previous section, app marketplaces are for more than just apps. These marketplaces can offer multiple forms of content that can enhance, extend, or customize a platform’s functionality.

This content can do more than extend functionality; it can also create new revenue streams for your platform. Adding payment functionality to an app marketplace enables developers to charge for their content through a revenue-sharing model. The majority of app marketplaces for major platforms offer some version of revenue sharing. Apple and Google both take a 15% share up to the first $1 million in revenue earned, with the share increasing to 30% after that. 

Different Content for Different Use Cases

The content types offered depend on platform features or a platform’s API (Application Programming Interface). 

  • Apps – on the Apple App Store, developers can offer mobile apps built to interface with Apple’s iOS operating system or other third-party APIs or data.
  • Workflows and templates – in Hubspot, developers can create workflows and website templates that Hubspot users can add to their Hubspot instances.
  • Integrations – on Slack, developers can leverage the Slack API to create custom integrations to their platforms, such as the Trello integration. 
  • Courses and modules – app marketplaces can also be used as distribution platforms for customized learning materials such as videos, audio, and other digital formats. 

Generating Revenue through App Marketplaces

App marketplaces offer multiple payment models and methods such as Stripe, PayPal, and others. The choice of payment method depends on the platform’s business goals and the countries that the app marketplace is available for end-users.

Offering one-time purchases was the standard for app marketplaces, but the subscription model has quickly become the primary purchase model for most B2B app marketplaces. 

  • Free – app marketplaces can offer content for no cost if the third-party developer agrees to this model. It’s primarily used in mobile app stores where the mobile app includes advertising to generate revenue for the developer.
  • Paid – after the free model, paid apps are the second most common purchase model in app marketplaces. End users pay a one-time fee for the use of an application or other content.
  • Freemium – one of the most popular models used across app marketplaces, freemium provides end-users with limited functionality or a timed full-feature trial that automatically converts to a paid subscription after a specified period.
  • Subscription – whether monthly or annually, subscriptions are the preferred purchase model for the majority of B2B SaaS app marketplaces. Many developers offer a discount for an annual subscription versus a monthly subscription. 

What are the Benefits of App Marketplaces?

App marketplaces have transformed how platforms interact with their end-users. Today, having an app marketplace is a table-stakes feature for emerging and established platforms. Video conferencing leader Zoom saw tremendous growth in 2020 with the move to working from home. While they initially launched without a marketplace, they announced the availability of Zoom Apps in July 2021. Generating revenue for your business — and your third-party developers — is only one of the benefits of operating an app marketplace.

Customer Retention

Extending your platform’s functionality through an app marketplace creates more reasons for customers to continue using your platform. Customization for specific business cases and end-user needs ensures that your platform becomes a must-have for your customer’s technology stack or business.

Marketing and Public Relations

App marketplaces provide marketing and PR opportunities to promote your platform. A growing content catalog demonstrates the health of your business in both marketing and PR campaigns. Platforms can also find co-marketing opportunities as larger third-party developers create content such as apps, integrations and workflows for those platforms.

Raising your Platform Profile

App marketplaces can help drive more interest and awareness of your platform — with customers and third-party developers. Apps and other content can amplify your core messaging and value proposition. For developers, hearing news about other developer success stories on your app marketplace can drive interest in your platform, further extending the value for current and future customers. 

What do you need to make an App Marketplace Successful?

App marketplaces involve multiple teams within an organization, including product management, development, marketing, finance, and others, to make it a success. Before you cut the ribbon for your marketplace’s grand opening, here are some areas that you need to be involved in your planning.

Pricing and Legal

Your legal team will give guidance for what countries and geographies your app marketplace can operate. If your app marketplace hosts apps with user-generated content, such as a social media app or a customer review app, you may be subject to legal requirements for the countries you offer your marketplace. 

As a potential profit center for your organization, your finance team will be involved with selecting and configuring the payment methods and currencies your app marketplace will use. You’ll also need to determine what payout methods and currencies you’ll offer to your third-party developers. 

Documentation and Requirements

If you’re launching a new API or making your API publicly available for the first time, you’ll need to ensure you have comprehensive documentation for your developer community. 

You’ll also need to have a clear set of app marketplace requirements for developers. These requirements should include sections on app metadata, submission requirements, and standards for app and content quality. App marketplaces are judged by the quality of your catalog — more content doesn’t always equate to a store becoming successful.

Developer Relations team

Behind every great app marketplace is a great Developer Relations team. This team should have a deep understanding of your platform, APIs, and, most importantly, your customers. Developer Relations professionals work with third-party developers to help drive the creation and submission of new content. They also support your business development team as they work to onboard new partners.

Marketing Support

App marketplaces offer your marketing team new and exciting content to help support their campaigns. Your marketing team needs to be involved in every step from the marketplace launch to co-marketing opportunities with content partners.

Launch Partners

You never get a second chance to make a first impression. The launch catalog for your app marketplace is your opportunity to showcase top-tier partner content and emerging partners that offer unique solutions for your customers. 

Questions to Ask as you Plan your App Marketplace

Not sure where to begin with your marketplace strategy? Here are some questions to ask your team to help guide your planning. We also have an App Store Requirements Generator to help you further define your marketplace strategy.

  1. What countries or geographies will you offer your app marketplace?
  2. What payment methods and currencies will you provide to marketplace customers?
  3. What payout methods and currencies will you provide to content providers and third-party developers?
  4. What requirements will you have for content in your app marketplace?
  5. Do you have a support team and processes for customers and content providers?
  6. Do you have a developer relations team to support your content providers and third-party developers?
  7. How will you handle API changes and deprecations?
  8. What does success look like (metrics) for your app marketplace and your content providers?

Learn more

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