Let me guess why you are here.
You have an amazing product.
But not the kind of traction it deserves.
You are on a budget.
Paid marketing is expensive as hell.
And SEO? Takes ages to see any results.
So you are asking yourself.
Why not launch a deal on AppSumo, to gain early users without spending a fortune?
But the rational part of your brain is like, Is it even worth it?
You see, a few months ago, I was in the same boat as you are today.
Going through the same questions, that are boggling your mind.
So, to cut the story short.
In Jan 2022 we launched a deal on AppSumo for my hosting company WP Buzz.
In this post, I’ll share with you, my personal experience launching a deal with AppSumo.
How the process works.
How much money, did we make on Appsumo?
And most importantly! do the AppSumo-acquired users result in MRR (Monthly Recurring Revenue?)
By the end of this post, you will have all the information you need, to make an informed decision.
So let’s dive right in.
Why AppSumo?
Let’s face it, acquiring early users for your product is super hard.
It’s even harder when you are asking strangers to part with their hard-earned cash and commit to your product.
A product they have never heard of before.
Now imagine yourself in the shoes of your prospective users.
Would you trust a brand with no users and no reviews?
Well, the answer probably is a big hard NO.
You get the point. Getting the attention of your prospects is super hard.
However, there is one tried and tested way to get someone’s attention.
In the all-time classic hit movie The Godfather, Marlon Brando acting as Don Vito Carlone said,” I’ll make him an offer he cannot refuse.”
Still, you need an audience to give an offer to.
Nobody would know about your offer without an audience.
Yes yes, there is a way to promote that offer via social and other networks.
But the problem is no Facebook group owner, Reddit moderator, or famous influencer, would allow you to use their audience to promote your product.
In my experience, most would demand an extortionate amount of moolah to promote your offer.
Moolah which you as a startup owner don’t have.
The good news?
This is where Appsumo comes in.
Appsumo has a humongous amount of deals-hungry audience.
And guess what? It is not a small audience either.
We are not talking about thousands or even hundreds of thousands of people.
A humongous list of 3.5 million good kind-hearted sumo-lings (that’s what they call their users) who are willing to be the early adopters of your product.
And best of all they are willing to pay you for it.
How awesome is that?
Now this may sound like the answer to all your product prayers, right?
But there is a catch.
Sooner or later you’ll realize that in the business world, no one gives a F@#&^ about you!
People will only part with their dollars (even with a good deal) if they are getting something out of it.
So what’s the catch?
It’s simple. You offer Sumo-lings a heavily discounted lifetime deal and they will happily become your early adopters.
What’s In It For You.
You get an opportunity to create a lot of buzz for your brand.
You get early adapters for your product.
Your early users will help you validate your idea.
Refine your product so that you can find a product market fit.
Possibly get you lots of press coverage.
You get to raise much-needed funds for further development and marketing purposes.
Best of all, you get all this without spending a penny.
Awesome right? Winner winner chicken dinner.
What’s In It For AppSumo.
Appsumo provides you with a platform of highly engaged early adapters.
They take a commission on every sale your product makes on their platform.
It is a win-win for both Appsumo as a marketplace and you as a product owner.
Now, that you have a good idea of how Appsumo can help your product.
There may be a bit of not-so-good news.
Appsumo only allows certain types of products to be sold on their marketplace.
Type Of Products Can You Sell On AppSumo.
Appsumo is a marketplace for digital products.
According to the Appsumo website. You can sell the following types of products.
- Software
- Online courses
- WP plugins
- Ebooks
- Template library
- Chrome extensions
- Conference tickets
If you cannot find your product in this category please do not worry.
Go ahead and list your product anyway.
Over time, I have seen a wide variety of products listed on Appsumo, ranging from web hosting to AI-powered SAAS products.
I have also recently bought a sticker mule deal from Appsumo and it was for a physical product.
So, in my experience, whilst not every product may be accepted.
You’ll have to go ahead and sign up as a seller here and give it a try.
But before that, there is a difficult choice you’ll have to make.
AppSumo Select Or Self-Listing Marketplace?
Appsumo has two options for listing your product.
1- Appsumo marketplace:
This is where almost everyone who can pass the compliance (more on that below) is allowed to list their product.
There are no perquisites as such.
You build and submit your deal. It gets verified by the Appsumo team and you go live.
The commission charged by Appsumo is quite reasonable in this case.
We chose this option.
Now this is for companies that already have a validated product or some traction in advance.
Only 1% of the thousands of applications Appsumo receives make it into this category.
Whilst it may be difficult to get selected for this deal. The benefits are humongous.
Appsumo does all the heavy lifting for you, including marketing, making product videos, and promoting it to millions of its members.
You may also get lucky and get a chance to feature on their homepage.
This would mean getting the attention of millions of eyeballs on your product.
This can change the trajectory of your brand for good.
Types Of Deals You Can List On AppSumo.
There are two types of deals you can list on Appsumo.
1- A lifetime deal:
This is where the users pay for your product once and get to use it for as long as your brand exists.
2- 1 Year deal:
This is where you offer a huge amount of discount for the first year of your normal pricing.
And you expect your users to support you in the coming years.
We opted to go for offering a 1-year deal.
This is because in the hosting industry.
It is not possible to sustain a lifetime deal.
This is due to the ongoing infrastructure and support costs you have to pay every month.
I will come back to this point later down the line.
But before that, you’d have to make a decision.
Should you offer a lifetime deal or a 1-year deal?
Lifetime Deal Or A One-Year Deal.
Well, it depends upon your product and industry.
For example: If you are an AI provider using OpenAI API to build products.
Your costs will probably be low as OpenAI is dirt cheap (at the time of this writing.)
In that case, you can consider offering a lifetime deal.
On the other hand, if you are in the hosting industry like us.
The web hosting industry is support intensive.
This means your users will require instant support.
This means you have to pay for support and server costs every month.
It would therefore be unwise to launch a lifetime deal in this case.
So a lifetime deal in my experience will be unsustainable in the long run.
However, there are some benefits of launching a lifetime deal as compared to a one-year deal.
- You’ll sell more deals and make more money. Most Sumo-lings expect lifetime deals in exchange for supporting your brand.
- This can result in Appsumo featuring you in their newsletter. This means more moolah and brand recognition for you.
- Appsumo has a huge amount of affiliates that will promote your product left right and center. This can result in huge PR for your brand. You might even appear on entrepreneur.com like us who knows?
As for the 1-year deal.
- You’ll probably make fewer sales.
- You’ll struggle to sell on Appsumo as your competitors may be selling the same product as LTD.
- The conversions on your deal page may suck.
- You’ll, however, most probably not go bankrupt as you will not be promising something you cannot deliver.
- You may make less money. But you’ll get loyal customers who understand the value of great products and support as opposed to unsustainable promises.
How To List Your Product On Appsumo Marketplace.
Once you have decided whether you want to offer a one-year deal or a lifetime deal.
The listing process is self-service. This means you can create the listing yourself.
To make this process easier, Appsumo does have a lot of help available.
You can head straight to the Sell On Appsumo page here and click on Start Selling.
At first, you will come across a login page where you can log in with your Gmail ID.
Alternatively, you can create a new account using your email and password.
After creating your account, you can click on Add Listing in the top right corner, and the deal submission wizard (form) will come into action.
This submission wizard is divided into five sections for easier
- Product basics
- Categories
- Details
- Pricing
- Redemption
All these sections are self-explanatory, with plenty of scroll-over popups to help you fill in the details.
However, if you need help with filling out any of the sections.
There is a small chat bubble in the bottom right corner that has lots of helpful documentation to help you.
Alternatively, you can get in touch with Appsumo and they will be more than happy to help.
In a nutshell, creating a listing for your product is super easy.
How Onboarding Works?
Once you have submitted your listing, it will then go to the Appsumo compliance team.
The compliance team will then perform their due diligence to ensure that your business is genuine and that you are not a hoax.
In our case, when we submitted the WP Buzz deal on Appsumo.
It was rejected at first.
So I sent Appsumo an email explaining how our competitors with no users were allowed to launch a deal whereas WP Buzz an established company is not allowed.
I addressed all their concerns one by one to remove the blockers.
I sent links to reviews by our existing users on how they love our product (This was of great help.)
How our deal is significantly better than our competitors.
How we were offering US-based servers and automatic daily backups.
Something that our competitors could not afford to offer.
I received a reply back that they will perform a second review shortly.
Upon review, the WP Buzz listing was approved.
What does this tell you?
Even if Appsumop rejects your product at first, do not give up.
Follow up and try to remove the objections.
Later, we received an email that our listing had passed the compliance stage and was ready for the launch team.
However, Appsumo wanted us to change the Title of the deal and a few other things.
According to the compliance team, “Lightning-fast hosting seems to be an exaggeration and may leave clients, with an untrue impression.”
Needless to say, we complied with all their demands.
And the listing went to the launch team.
This is where we came across another blocker.
Our built-in code redemption system refused to work when the launch team tested it.
After going back and forth with this issue.
We ended up implementing a different code redemption system.
That worked like a dream and we were given a launch date.
Below, I have summarised a few things about getting accepted by Appsumo.
How To Ensure That You Get Accepted By AppSumo.
To ensure that your product is accepted, make sure that:
- Your product solves a real-world problem.
- It is better or cheaper than existing products in the market.
- It makes the lives of your users easy.
- Helps your users be more productive.
- Saves them time, money, or both.
- Your product is top quality. No half-baked software or the sumo-lings will shred you into pieces. And you will never be able to recover again ever.
- The deal is a genuine saving. Do not temporarily inflate the prices to launch the deal. Being honest with sumo-lings goes a long way.
- Do not go in with zero users. Try acquiring a few users first to see how your existing users interact. This will also ensure that you are targeting the right users.
- Write an engaging copy. Words sell right? You can make a totally boring product interesting with the right copy. But do not try to be too clever. Just be interesting and honest.
For more info please have a look at this free partner success guide here.
The Launch Day.
I’ll be honest with you. After going through the ordeal of launching the deal.
We were expecting fireworks.
After all, AppSumo has millions of users right?
So I got myself and the team ready for a flurry of questions.
Everyone was ready to take the orders and reply to every ticket in under 7 minutes.
But guess what?
How many sales did we make on the first day?
A whopping zero, zilch, nada baby.
Disappointing right?
Turns out Appsumo has a different way of doing things when it comes to self-listed products.
First, they want you to promote your listing yourself.
Get a few sales, and a few reviews, and then they may jump in to help and promote.
I am not sure whether they include your listing in the newly launched deals email.
However, after a disastrous first day.
The sales slowly started to trickle in.
After the first two reviews, the sales increased.
But did they reach an impressive number?
Our Deal, A Master Stroke, Or A Disaster Shot?
In all honesty, I wouldn’t call our listing either a masterstroke or a disaster shot.
And it’s not Appsumo’s fault.
You see, our inexperienced competitors were selling similar products as a lifetime deal.
Whilst we only launched the one-year deal.
What our competitors did not realize is that;
Launching a lifetime deal for hosting is nothing more than launching a Ponzi scheme.
In my opinion, lifetime hosting deals are unsustainable.
Unless someone is in it for a quick buck.
This is due to the ongoing operational and support costs.
This has already been proven by dozens of hosting providers becoming unresponsive as soon as their lifetime deals ended.
I have reiterated this multiple times on the Appsumo listing.
And it started to make sense to sumo-lings, who would prioritize quality over quantity.
But as soon as we started getting some traction.
The disaster struck.
AppSumo Killed Us!
You see! After the initial slow start.
The sales slowly started to trickle in.
We were sure that after a few more reviews.
We will start killing it. Just like we did on Stacksocial even on a smaller reach.
But then the disaster struck.
On 04/05/22, We received an email from Appsumo that they had decided to remove our listing.
We were shocked.
Initially, we thought. This may only be happening to WP Buzz.
But why? We were awesome.
After all, the sumo-lings were happy with the speed of their sites.
And our amazing 7-minute support time.
So I quickly shot an email to the partner support.
Turns out, It’s not just the WP Buzz listing that was being removed.
But all the hosting listings on Appsumo were removed.
This was mainly due to three reasons.
- Making false promises. Eg: Promising US servers when they cannot afford to do so.
- Not proving the support they promised: After the slowdown of sales. 50-70% of the hosting cost is providing quality support
- Running a Ponzi scheme: Coning the sumo-lings of their hard-earned cash by sustaining their hosting business with new sales and abandoning the product altogether at the end of the ltd.
Appsumo is not to be blamed, to be honest.
They have worked hard for years to build their brand.
And their first priority is to ensure that sumo-lings are happy.
If I was Appsumo’s CEO, I would have done the same to protect my brand.
Moving on to another crisis we faced at Appsumo.
Churn Crises At Appsumo.
Appsumo provides a 60-day money-back guarantee.
A fantastic value proposition indeed.
But some of the sumo-lings may misuse it.
For example, a few people bought lots of codes.
Engaged the support for hours and hours.
Only to refund all the codes after 59 days.
But after years in the hosting industry.
I have come to acknowledge this as part of a game.
Or part of the parcel as the Brits say.
Here is a word of suggestion though.
If you do launch a deal and you are faced with a high churn rate.
Remember it’s not just sumo-lings.
It may be your competitors.
But I would caution against prejudice.
Treat everyone like a King.
But what about payment?
How Much Commission Does Appsumo Take?
There seems to be a huge outcry online about the amount of commission Appsumo takes from its sellers.
Some claim they keep 70% of the sale.
I found this to be untrue.
Appsumo took a 30% commission from us for every sale attributed to existing sumo-lings on their platform.
And a merely 5% with the sales generated through new users.
As for Appsumo Select.
This commission may be higher I presume. Please confirm this with AppSumo.
Because Appsumo fights tooth and nail to promote your product to millions.
Not an easy feat I must say.
You can learn more about the commission structure here.
Does, AppSumo Pay On Time?
Yes, Appsumo is awesome and they pay on time.
Just like clockwork.
And guess what?
That amazing feeling of money hitting your bank account.
Never gets old.
It’s too addictive tbh.
US Tax Trap & How To Avoid It?
Did you know that if you are based outside the US.
The US companies can legally keep 30% of your earnings for Tax purposes.
Although I am not an accountant.
However, since I have used two US-based marketplaces to promote WP Buzz.
Luckily! there is a way to avoid this.
If you are based in a country that has a tax treaty with US.
For example, as I am based in the UK.
The UK has a tax treaty with the US.
This means. I can bring all my earnings from the US to the UK and pay all the taxes here.
If you do not want Appsumo to withhold 30% of your earnings on top of 30% commission.
You would have to fill in a form.
I will write a separate post on that later on.
But please do not take my word for it.
Consult with a professional accountant in tax matters.
The Pros & Cons Of Launching An Appsumo Deal.
Here are some pros and cons of launching a deal on Appsumo.
Pros:
- Product validation.
- Ability to streamline your product market fit.
- Early traction.
- Product awareness.
- Free publicity.
- Free user acquisition.
- Raising funds to invest in your brand.
- Snowball effect.
- Loyal users.
- Attract Appsumo affiliates.
Cons:
- One-time revenue. Unless you are launching a one-year deal like us.
- Provide lifetime product and support till you exist.
- It can be hard to convert LTD users to PAYM (pay monthly users.)
Things To Consider Before Launching A Lifetime Deal.
Here are a few things to consider before launching a lifetime deal.
According to my analysis, the following types of products should be considered launching an Appsumo campaign.
a) A working MVP.
Half-baked products won’t cut it. Try acquiring a few beta users by launching your product on sites like betalist.com
b) Demand.
No point in launching a deal for a product that has no demand.
One way to determine if your product has demand is by studying your competitors and their revenue.
If your competitor is doing well. You can too.
Remember Google was not the first search engine.
c) Already Doing Well:
If a product that may be similar to yours is already doing well on Appsumo.
Chances are you can nail it as well.
Depending upon the execution of course.
d) Sustainability:
Most Appsumo deals are lifetime deals.
Is your product financially sustainable if you are unable to convert ltd users to MRR?
One example of sustainable products is AI-based.
Openai and similar tools are as cheap as chips.
So if you are building your product on top of the Openai platform.
You should be fine for a bit.
But eventually, you will have to figure out a way to achieve recurring revenue for your product.
Web Hosting for example is unsustainable when it comes to lifetime deals.
Even if you are not actively acquiring new users.
You would have to pay for servers and support every month.
f) Servers cost:
If your product can be downloaded on the user’s machine.
And it utilizes its machine resources to perform tasks.
For example, a screen recording product like Screenstudio.com
Then launching a lifetime deal would be a perfect fit for you.
On the other hand, if your product is cloud-based.
You have to pay for AWS or GCP servers every month.
Then it may not be a good idea to launch a lifetime deal.
The server costs can significantly mount up even with a few power users.
This may result in your product becoming financially unsustainable.
Coming back to our Appsumo deal.
What happened with the users we acquired through Appsumo?
Do the Appsumo Acquired Users Result In MRR?
It has been a year since our 1-year deal ended.
Therefore I am in a position to reveal whether the users we acquired via Appsumo renewed with us or not.
And, you’d be surprised.
As an experienced reseller.
Our targeting and deal messaging were spot on.
Even though we only acquired a tiny amount of users from Appsumo.
These were the power users.
Agencies and freelancers.
Because we provide fantastic customer service on top of a blazing-fast WordPress hosting platform.
These users ended up staying and renewing with us.
Adding a good $2k+ to our ARR.
And all that without spending a single penny.
Winner winner chicken dinner! ????
Is Appsumo Worth It?
Even though Appsumo decided to shut us down as soon as we started gaining traction.
Still, I’d say that.
It was every bit worth it.
And if we have to do it all over again.
We will not hesitate to re-launch the deal.
And finally!
This Is How Much Money We Make On Appsumo.
The wait is over.
We made a grand total of $1,065.36 with our Appsumo deal.
This is significantly less than the $17K OTR (one-time revenue) we made with StackSocial.
But guess what?
In a competitive industry like web hosting.
Something is better than nothing.
I would also like to mention that we added $2k in ARR in total.
This is because Appsumo abruptly killed our listing.
The ones sitting on the edge signed up directly with us on our site.
That’s A Wrap!
If you were sitting on the fence regarding launching your product on Appsumo.
I am sure this blog post will give you some clarity.
And help you make an informed decision.
If you have any questions.
Please do not hesitate to ask below and I will be more than happy to answer.
Over to you!