How In-App Purchase Fees are Impacting Your Business

There have been polarizing changes in the industry to how app stores handle the purchase and registration for virtual (livestream) classes. Classes which have been the saving grace for small businesses through the Coronavirus pandemic... We have been committed to being transparent with our clients throughout this transition and we wanted to keep our industry in the know of how these new guidelines will negatively impact businesses.

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Summary of the Situation

  • App stores have decided that all livestream one-to-few and one-to-many (i.e. classes and events), are now considered Digital Content and fall into the domain of In-App Purchases.

  • In-App Purchases will now charge a 30% fee on all revenue earned from said Digital Goods that allow access to Digital Content.

  • fitDEGREE will be implementing features to filter out these Digital Goods from certain mobile applications and hosting them solely on our Progressive Web App and other app platforms that have not implemented these egregious fees.

Making the Switch

What happened?

Back in September 2020, a tech giant decided that group fitness classes that were instructed via livestream were now considered “Digital Goods” and fell under their umbrella of influence by becoming an “In-App Purchase”.

In-App Purchases were typically reserved for app store games such as Angry Birds and CandyCrush. With the fitness industry going digital, a certain tech giant decided to seize the opportunity to audit additional industries to seek new revenue streams.

The ramifications of In-App Purchases have major consequences…

1)     All purchases for Digital Goods (i.e. memberships, packs and drop-ins), would now have a 30% fee by the app store, leaving you with only 70% of your revenue instead of the usual 97% after traditional processing fees.

2)     In-App Purchases would make it so you, the merchant, would have little to no control over the ability to apply refunds to these Digital Goods as well as give your clients the ability to manage gift cards and account balances.

As if that wasn’t enough, unfortunately there is more… With certain tech giants pushing for In-App Purchases, they also share in their guidelines that it is prohibited to encourage clients to make Off-App Purchases. Not only does this mean that we aren’t allowed to share on our mobile application that the purchases of Digital Goods can be found on our website version, BUT it implicates that we cannot use contact information (email and phone number) that was submitted during a mobile application account creation to make clients aware that Digital Goods can be found on outside platforms.

How will fitDEGREE respond?

fitDEGREE will NOT stand for this and will do everything that we can to SUPPORT small businesses.

To work within the guidelines imposed upon us, we can still move forward with the sales of traditional “In Studio” products, however we will be taking Digital Goods off of certain apps and moving them solely to our Progressive Web App version, found at https://app.fitdegree.com/ and other app platforms which are not imposing fees.

Moving these purchases to solely be on these platforms will allow your business to continue collecting the revenue you earned and rightly deserve.

This also means that we will have to move account creation to the a website widget as well so that if we were to be audited, we can justly say that all contact information was submitted through our private fitDEGREE platform. That way we can allow our clients to share any information regarding where to purchase Digital Goods with their clients.

While we recognize this as an inconvenience, we don’t believe that taking 30% of a small businesses’ revenue is fair or just. We also believe that you have a right to your client information and should use it as you see fit to contact them to perform sales and other outreach. At fitDEGREE we strive to be a progressive software dedicated to innovation and we would much rather have our focus be on helping our clients grow their businesses. We've decided that we will not give in to these bullies and allow them to change our view on how we should service our fitFam.

What are the next steps?

In an effort to build a brighter and more fair future, we have submitted a membership application to the Coalition for App Fairness (https://appfairness.org/). The Coalition for App Fairness is an independent nonprofit organization founded by industry-leading companies to advocate for freedom of choice and fair competition across the app ecosystem. You can read our membership application submission here - LINK. We will keep you posted as things progress.

This is an unfortunate situation, but as entrepreneurs and business owners, we are faced with difficult challenges time and time again. We appreciate your support throughout this time and hope that you understand and agree with the decisions that we are making to navigate this hurdle.

Keep up to date with how fitDEGREE is
navigating this topic by joining our private
Facebook group.

Learn more

Frequently Asked Questions
by fitDEGREE
Clients

Disclaimer that all of the following answers are based on our current knowledge of the situation and that unfortunately, any of these answers can change in the future depending on how these tech giants continue to enforce changes of their policies.

Can I redirect my impacted clients to the website platforms?

Unfortunately, you cannot. Part of the guidelines include that you cannot redirect your clients on the impacted mobile applications to make “Off App Purchases” that they consider to be In App Purchases.

Will clients be able to see virtual classes on the impacted mobile application?

This will be your choice. We have already added the button to your Admin that gives you the choice to either display your virtual classes as view-only or remove them entirely from the impacted mobile applications. You can find this in the App Settings section of your Setup.

In the Admin after I click that a Class is virtual, is that all I have to do?

That’s it! Our next update will be to automate the process of making all memberships and packs that contain virtual classes in their perks to a view-only status on the impacted mobile applications. Similar to class registration, they will be able to be purchased on the website versions of the platform.

What if my clients already have memberships or packs for virtual classes?

Registration for all virtual classes on the impacted platforms will be on a view-only status. All impacted mobile applications clients will either have to use the web browser version of the fitDEGREE platform or your website widget in order to make a registration.

When will the 30% fee be introduced to us?

Never! We plan on operating inside the guidelines by creating appropriate workarounds to avoid this fee.

Has the 30% been affecting us already?

To date, all of our clients have received 100% of their revenue from virtual classes, minus the traditional processing fees.

What are the payment processing fees?

Yes! There are no hidden costs associated with signing up for fitDEGREE. After your initial setup fee, you will have a single monthly fee and a flat payment processing fee of 2.9% + $0.30.

How frequently do you payout the Studio from Payment Processing?

At the end of every day. If someone pays you on Monday you will see it in your bank account on Wednesday.

How long does it take me to get set up on your system? If I wanted to switch today, how long would it take?

Onboarding timelines are on a case by case basis, depending on your studio's needs. This includes personalized training, U.S based support, and aid launching to your community as well. Ask us about our launch email support and how-to videos!

What support will I get setting up my account?

All of it! There are multiple meetings available for you to take advantage of starting with a Meet Our Team session all the way through training and launch! Each of these meetings is done with a consistent U.S based expert.

Is your customer support U.S based?

Yes, and proud of it.

Do I really get all the features for just $80 per month?

Yes! You will get all of the features with no limitations for $80 per month when you sign up for the year. If you would like to go month to month with no contract, it will be only $100 per month.

Do you offer a branded app?

Yes! For an additional $100 per month you will have your very own branded app on the App Store and Google Play Store. If you’re hesitant to start with the branded app, you can always add this later!

Does the software have automatic billing?

Of course! You can set up weekly, monthly, quarterly, and even annual pricing plans for your memberships.

Is there a limit on how many members I have in the system?

Of course not! We encourage you to have as many members, instructors, classes, and events as you possibly can!

Can I upgrade my plan later on?

Of course! We allow clients to both upgrade and downgrade their plan on a month to month basis.

Why do people choose your company?

Easy interface, feedback driven functionality and a team behind it that cares.

How long has fitDEGREE been around?

fitDEGREE has been around since 2015 but we came to the studio fitness industry at the request of studio owners like you in late 2018.

Learning To Pivot

From COVID-19 to the California Wildfires, 2020 was the catalyst that taught Jennifer how to pivot.

“The amount of pivoting we have done this year is crazy to think about; however, I am happy and proud to say... We never closed once!”

All throughout 2020, Perfect Union remained open in one way or another. After just one day of mandated shut down, Perfect Union had set up virtual classes and was operational the very next day.

For Jennifer, it was easy to pivot because she knew people were counting on her to keep them healthy and sane during 2020. She believes that, as a studio owner, there is so much gratification when you see people transform their lives right in front of you and she doesn't want to see her clients regress and lose all of the progress they’ve made.

So she did what any studio owner with grit would do… She kept going.

“Community for us is creating a supportive environment. People become family here. We all know one another, we cheer each other on, and accept each person for where they are at in their journeys.”

Tips for the Transition for fitDEGREE Clients


1) fitDEGREE does provide a complete website version of our client facing app, also known as a Progressive Web App (PWA). This can be found by going to your Setup page and clicking on Widgets underneath My fitSpot. The link is in the top bar under App Share Link. This will lead your clients directly to your page without them having to select a fitSpot.

2) Implement any and all website widgets. We have already created website widgets for your Live Schedule as well as One-on-Ones and Announcements. This can be found in the same spot of your App Share Link. If you want to skip the widgets, you can actually put an iframe of your PWA on your website too! Check out the custom HTML code for this below, all you have to do is change “app-share-link-here” to your actual link.

<iframe src="app-share-link-here" height="500" width="700"></iframe>

3) If you currently display pricing items on your app, you can create a pricing page to your website with descriptions of all your memberships and packs and then attach your Share link. By clicking into each membership and class pack, there will be a custom share link for each pricing item. This will lead clients directly to a cart and allow them to complete their purchase.