How to keep growing without hitting the $1M threshold
When iTunes first launched for musicians, the platform implemented a 30% commission structure - a significant percentage that raised eyebrows but became industry standard.
This same rate was later applied to Apple’s App Store when it launched in 2008, creating the framework that app developers now work within.
It's undoubtedly a substantial slice of revenue that has many developers looking for creative solutions to maximize their profits while maintaining their presence in this powerful marketplace.
In 2020, Apple faced an antitrust lawsuit from Epic Games, while the European Commission opened a formal investigation into the App Store. Soon after, Apple announced the App Store Small Business Program in November 2020, with it taking effect on January 1, 2021
A million dollar question
Developers with less than $1 million in annual proceeds qualify for the App Store Small Business Program, which reduces Apple's app store fee to 15%.
That $1 million refers to proceeds, meaning what you keep after Apple's commission, not gross consumer spend. At a 15% rate, $1 million in proceeds is roughly $1.18 million in gross consumer spend.
Once proceeds exceed the threshold, subsequent App Store transactions are subject to Apple's standard 30% fee for the rest of that calendar year.
Developers must disclose all affiliated accounts because the threshold is calculated using the cumulative proceeds of those accounts. Spreading income across multiple apps will not keep the threshold at bay.
This sudden increase can have a serious impact on profitability, especially for businesses with tighter margins. Founders approaching the threshold should understand the difference between proceeds and gross spend before making growth or pricing decisions.
Read more about the App Store fee threshold and the fee math.
Can your app still grow while staying under the $1M threshold?
Many app developers approaching the threshold assume there is no way to avoid the 30% fee once they cross it. They see the fee increase as an unavoidable consequence of success.
Some developers even cap their growth intentionally to stay below the threshold. That is not necessary.
Many apps keep App Store revenue below the threshold and route subscription overflow to a web checkout. This is known as web monetization and has two key implementation options, both serve different purposes and are suitable for different regions.
Here's a quick summary of both:
Web2App
Web2App acquisition starts with a user outside the app store ecosystem. You bring traffic from channels such as paid social, search or content to a web funnel. The user completes onboarding, starts a trial or makes a purchase on the web, then downloads or opens the app.
The flow looks like this:
Web traffic → web funnel → web checkout → app
Web2App is primarily an acquisition and conversion strategy. It helps app businesses control more of the funnel before the user reaches the App Store.
Other Web2App benefits for smaller app developers
As well as helping app developers keep more revenue, a Web2App strategy can:
- Improve cash flow: Receive payouts sooner than the App Store's payment cycle, which typically pays out around 33 days after the end of each fiscal month
- Give you more marketing control: Avoid some of Apple's privacy restrictions, including SKAN and ATT, so you can get more useful attribution data for paid campaigns.
- Make experimentation easier: Test pricing, messaging and offers outside the App Store's restrictions.
- Expand your audience: Reach users through a wider range of acquisition channels instead of relying mainly on app store discovery.
- Help you move faster: Tweak funnels without waiting for App Store approval, so you can test and optimize for different personas.
App2Web
App2Web external payments starts with a user who is already in the app. You offer them a link from the app to a web checkout. We only recommend this flow for US customers, following the 2025 Epic vs. Apple ruling.
The flow looks like this:
App → external link in the app → web checkout
You keep the benefits of the app store while harnessing the advantages of the web: better LTV, attribution, control of the customer relationship, and the ability to stay below the threshold.
App2Web is a hybrid motion, not a migration
App2Web does not mean moving your entire billing operation away from Apple.
Apple still requires developers to offer in-app purchase on the paywall. Existing Apple subscribers also cannot simply be moved to the web. They need to cancel their Apple subscription and resubscribe through the web, which creates unnecessary friction and can introduce churn.
The practical model is to run IAP and web payments in parallel:
- Keep Apple IAP available for users who prefer the native payment experience.
- Offer an external web checkout as an additional option.
- Keep existing Apple subscribers on Apple unless they choose to cancel and resubscribe.
- Use the web for new customers, selected cohorts or users who choose the external option.
This hybrid approach lets developers test the web channel without treating it as a full migration project.
What Cal AI clarifies about App2Web
Following the Epic v. Apple ruling back in 2025, App2Web was technically allowed, but many developers questioned whether or not Apple would adhere in good faith.
A year on, things are less opaque. Brands like Runna, Codeway and HubX are running external payments safely and have faced no repercussions, ranking in the Apple charts while shifting significant revenue to the web.
When Cal AI, a leading calorie tracking app, was pulled from the app store back in April, some developers assumed this was the start of a push-back from Apple. But the saga actually helped further define the app store’s red-lines.
After being reinstated the industry became clearer on Apple’s App2Web non-negotiables.
Three rules should guide any App2Web implementation:
- Offer IAP alongside external links. External checkout should be an additional payment option, not a replacement for Apple's in-app purchase option.
- Keep billing transparent throughout. Tell users when they are leaving the app, where payment will take place and who will bill them. Make the price and terms clear before they continue.
- Do not pressure users after they decline. If a user dismisses the external checkout option, do not immediately resurface it or use dark patterns to push them back into the flow.
Follow those rules and App2Web becomes a clear, manageable operating model rather than a compliance gamble.
The math: three ways to handle $1.3 million in proceeds
Here’s a simple example of web monetization in action.
Assume your developer account has already generated $900,000 in gross worldwide App Store sales this year, all qualifying for Apple’s 15% Small Business Program rate.
You expect another $400,000 in eligible US subscription revenue before the end of the year, taking total gross sales to $1.3 million.
For simplicity, this example excludes taxes, refunds, currency movements and differences in conversion or retention. It also assumes the incremental App Store subscription revenue would otherwise be subject to Apple’s 30% standard commission after you leave the Small Business Program.
Rates used:
- 15% Apple commission while you remain below the Small Business Program threshold
- 30% Apple commission on applicable revenue after you cross the threshold
- 5.5% cost on revenue processed through web checkout with a Merchant of Record (like Paddle)
At $900,000 in gross App Store sales, your proceeds after Apple’s 15% commission are approximately $765,000. That leaves around $235,000 in proceeds before you reach Apple’s $1 million Small Business Program threshold.
At a 15% commission rate, that gives you room for approximately $276,470 more in App Store gross sales before reaching the limit. Of the expected $400,000 in additional revenue, that leaves around $123,530 to plan for.
Scenario | App Store revenue | Web revenue | Estimated net revenue |
|---|---|---|---|
Do nothing and cross the threshold | $1,300,000 | $0 | $1,086,471 |
Route overflow to the web | $1,176,470 | $123,530 | $1,116,735 |
Route all incremental US revenue to web | $900,000 | $400,000 | $1,143,000 |
Be proactive and model the numbers yourself
The right approach will depend on your audience, conversion rates and product experience. But the broader point is simple: you do not have to wait until the Small Business Program threshold starts compressing your margins before thinking about web monetization.
For eligible US apps, web monetization can give you another lever for managing where new revenue is processed and how much of it you keep.
These figures are illustrative. Apple calculates Small Business Program eligibility using proceeds rather than gross sales, across the developer account and associated accounts. Subscription commission rates can also vary depending on subscriber tenure, so leave a buffer and model the economics using your own App Store Connect data and the latest Apple terms.
So, what's the catch?
Web2App and App2Web create clear opportunities for the right apps, but selling through the web brings operational responsibilities.
One benefit of the app stores is the payment and billing infrastructure they provide. They handle localized payments, refunds, chargebacks and sales tax across markets.
When selling directly on the web, these responsibilities become yours.
