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Like Apple and Google, Amazon reduces app store cut for small developers, but there is a twist

New Amazon benefits will let small developers take home up to 90 per cent of the revenue generated in a year.

Story highlights
  • Amazon has launched a new accelerator program for small businesses on its Appstore.
  • Under the program, small developers will receive AWS credits worth 10 per cent of the revenue.
  • The benefits will be stopped for developers once they exceed $1 million in annual revenue.

Amazon is the latest tech major to offer benefits to small developers availing its services. The world's largest online marketplace has announced Amazon Appstore Small Business Accelerator Program that will require new developers to pay less than usual for Amazon's cloud services.

The new program aims to reduce cloud infrastructure costs for entry-level developers and offer them better revenue share. For this, Amazon says that it will increase developer revenue share and add Amazon Web Services (AWS) credit options to developers that earn less than $1 million in revenue.

Due to start in Q4 this year, Amazon says that the program will offer total benefits of "up to an equivalent of 90 per cent of revenue" to the developers. This, however, is not offered at a straight-up discount.

Amazon will charge 20 per cent of the revenue to developers for its services. It will give back 10 per cent of the revenue in AWS promotional credits. So, the total benefits for the developers will remain to be up to 90 per cent as and when they use their promotional credits. Amazon says that developers can use these promotional credits for 12 months from the date they were granted.

The 80/20 revenue share will be default for all small qualifying developers upon the launch of the program. To receive the AWS promotional credits, developers will have to provide their AWS Account ID in the Appstore developer portal. Amazon says that the credit will be sent to the developers monthly.

New industry trend

The benefit is different from the reduced revenue cut offered upfront by Apple and Google recently. The two majors of the mobile ecosystem reduced their share from 30 per cent to 15 per cent for developer's earning less than $1 million in annual revenue.

The lessened revenue share followed Apple's major lawsuit against Epic, blaming the Cupertino tech major for having a monopoly over its App Store. Amazon now seems to have realised the industry-wide movement, bringing its twist to the generosity.

Amazon says that the AWS promotional credits will help developers benefit from more than 200 services it offers. Understandably, the strategy will let the company retain developers on its service while also attracting more newcomers to the industry.

Amazon states that the developers will stop receiving the benefits under the program once their revenue exceeds $1 million in a year. With that, the company will charge the standard royalty rate of 30 per cent of the revenue and will no longer offer AWS credits "for the rest of that year." For those who see a drop in revenue to below $1 million, "the developer will be eligible in the next calendar year" for the benefits.