Before you get started with AppSumo or any similar LTD (Lifetime Deal) partners, we highly recommend reading this in-depth article. It will guide you through the pros and cons of running a LTD, as well as the nitty-gritty unit economics shared by Puneet on his experience running a deal with AppSumo. If you are considering selling on the AppSumo Marketplace, check out Nicole’s experience with her plugin, Studiocart.
Do I need to share any revenue with Freemius when running a LTD through AppSumo?
Before we get into the technicalities, it’s important to understand that whether a transaction is processed through Freemius or not, the licenses still need to be managed for activations, deactivations, etc. If, for example, you sell 10,000-lifetime licenses, we’ll need to support 10,000 customers of yours – forever – Both on the resource side of things and support, when necessary.
Since we don’t have usage-based pricing yet, and we have expenses to cover; the 7% rev-share applies to your gross sales after deducting the LTD partner commission.
This means that if you sell a redemption code for $30 and AppSumo takes a 70% commission, your gross is $9, so our expected rev-share is $0.63.
In reality, we are not making any money on these deals. As these deals are already heavily discounted and structured for lifetime commitments, we typically lose money in these cases. With the context of the $30 license example, even if we end up with one support ticket per ~60 licenses you sell, we still lose money on support resources (not even counting the computing, storage, and bandwidth costs).
The only reason we have a process for LTDs that are not transacted through Freemius is that we know how valuable they can be for your business growth and reputation. Hence, as your monetization partner, we want to accommodate this necessity.
How to run a LTD while selling through Freemius?
Most LTD-focused websites will require you to send them a list of “Redemption codes”. When a customer purchases from AppSumo, they actually buy a redemption code they can use in order to get access to the paid plugin or theme and premium license key.
There are several approaches to handling this with Freemius.
Our first recommendation is to generate bulk license keys using our PHP SDK and send those to your LTD partner as redemption codes.
Your API permissions need to be elevated to generate bulk licenses, and your IP needs to be whitelisted to avoid any unexpected rate-limit restrictions. This is a manual tweak that we handle on our end after your binding commitment to the financial terms mentioned above. Once you agree to the terms, we will also send you a PHP snippet to generate bulk licenses.
In addition, in order for buyers to redeem their codes, you’ll need to create a redemption page on your website. You need to collect their name, email, and redemption code (license key). You can also optionally collect the user’s consent for promotional offers. If you do, we recommend adding a an opt-in checkbox with the following lable: “Send me security & feature updates, educational content and offers.”
Here’s a short snippet that showcases the backend implementation of a license redemption using the API:
<?php
$license = $api->Api("/plugins/{$plugin_id}/licenses.json", 'PUT', array(
'license_key' => urlencode($license_key),
'email' => $email,
'name' => $name
'is_marketing_allowed' => $is_marketing_allowed,
));
if (is_object($license) && !empty($license->user_id) && is_numeric($license->user_id)) {
// Successful activation, email sent. Redirect the user to the success page or show some message.
} else if (!empty($license->error)) {
$error = $license->error->message;
} else {
// Unexpected message.
}
If you prefer to use a ready-made solution, our awesome partners at Stackable created this nifty little plugin that adds a complete redemption page for AppSumo Codes for Freemius.
Upon successful redemption, the redeemed license is associated with the buyer’s details, and the buyer will receive an email message with their secure download link, license key, and account login information:
The benefit of using this approach over coupons is that you avoid storing thousands of unnecessary coupon records, as licenses are ultimately going to be necessary anyway.
