App Store Pricing Mistake Costing You 35% Revenue (Fix It in 5 Minutes)

Introduction

Apple's default pricing relies on simple exchange rates. While easy, this ignores a critical factor: Purchasing Power Parity (PPP). By not adjusting for local spending power, you are effectively overcharging users in emerging markets and leaving revenue on the table.

The Problem: Why Default Pricing Fails Globally

Apple's approach: $9.99 USD in the US, ₹999.00 INR ($11.06 USD) in India—same price tier, wildly different purchasing power.

To a user in India, that $11.06 might feel like paying $50 for a $10 item. It's simply unaffordable for the mass market.

With Purchasing Power Parity: $9.99 USD in the US, $2.27 USD (₹999.00 INR) in India—fair pricing that reflects what people can actually afford.

Understanding Purchasing Power Parity

States that the same amount of money should buy the same things in different countries, once exchange rates are accounted for.

Real-World Price Discrepancies

Let's compare what happens when you set a $9.99 USD price using Apple's default pricing strategy versus Purchasing Power Parity:

The Solution: StoreConfig's set-price Command

StoreConfig's set-price command provides an interactive way to set prices for your app, in-app purchases, and subscriptions. It supports two pricing strategies:

1. Apple Strategy: Uses Apple's default pricing tiers (exchange rate based)
2. Purchasing Power Strategy: Adjusts prices based on purchasing power parity

Let's see it in action.

Demo: Using set-price to Optimize Your Pricing

Prerequisites

Before we begin, make sure you have:

• StoreConfig installed and configured
• A storeconfig.json file (you can create one by running storeconfig fetch)

For this example, we'll be working with an in-app purchase from a demo app.

Step 1: Fetch Your Current App Configuration

First, let's fetch the current state of your app from App Store Connect:

The command creates a storeconfig.json file with your app's current configuration.

Step 2: Set Prices with Purchasing Power Parity Strategy

Now, let's use the set-price command to optimize pricing with the Purchasing Power Parity strategy:

The interactive command will guide you through:

1. Selecting what to price: Price of the app, in-app purchases, or subscriptions.
2. Choosing a base price: Enter your base price in USD.
3. Selecting a pricing strategy: Apple or PPP.
4. Setting minimum price (optional): Optionally set a minimum price to avoid prices that are too low in certain territories.

The command automatically updates your storeconfig.json file with optimized pricing for all territories.

You can see how PPP pricing adjusts prices to be more affordable in emerging markets. This creates a fairer pricing structure that maximizes both user acquisition and revenue.

Step 3: Apply Your Changes

Once you're satisfied with your pricing strategy, apply the changes to App Store Connect:

This command will apply your pricing configuration to App Store Connect.

Best Practices & Tips

When to Use Each Strategy

Use Apple Strategy when:

• You want to maintain consistent USD-equivalent prices across all territories
• You prefer Apple's standard pricing tiers

Use Purchasing Power Strategy when:

• You want to maximize global user acquisition
• Your app targets emerging markets
• You want to optimize revenue across all territories
• You're willing to adjust prices based on local purchasing power

Setting Minimum Prices

The set-price command allows you to set a minimum price to prevent prices from going too low in certain territories. This is useful if:

• You want to maintain a certain price floor for brand positioning
• You need to account for costs

Version Control Your Pricing

Store your storeconfig.json file in version control (Git). This gives you:

• Historical reference: See how your pricing and your app configuration has evolved over time
• Easy rollback: Revert to previous pricing if needed
• Analytics correlation & A/B testing: When analyzing your app's performance, you can reference your Git history to see what pricing was active during specific time periods
• Collaboration: Share your pricing strategy

Conclusion

Optimizing your App Store pricing with Purchasing Power Parity can significantly impact your app's success. By aligning prices with local purchasing power, you can:

• Increase conversions in emerging markets where users were previously priced out
• Achieve up to 35% revenue increase compared to exchange-rate-based pricing