How to Make Money From an App: Monetization & Costs

Published Friday 20 March 2026

Table of contents

• Can you still make money from an app?
• App monetization strategies
• Choosing the right monetization model for your app
• Costs of developing an app
• The process of building an app
• Marketing your app
• After launch
• Managing your app's finances
• FAQs on making money from an app

Key takeaways

• Focus on building a minimal viable product with only one or two essential features to keep development costs low and avoid expensive changes later in the process.
• Choose your monetization strategy based on your app type and user behavior, with subscription models working best for ongoing content and in-app purchases suiting games or feature upgrades.
• Prioritize user retention over initial downloads by monitoring which features get the most use after launch and improving those experiences while removing or promoting unused features.
• Track your app's financial performance from day one using cloud-based accounting software that connects with app stores and payment platforms to manage multiple revenue streams and delayed payment schedules.

Can you still make money from an app?

Yes, you can still make money from an app, particularly as the digital marketplace expands. A Bank of Canada survey showed that e-commerce has nearly doubled from pre-pandemic levels. Profitability still depends on your user base and pricing model.

Most apps charge nominal fees because dominant products have set low price expectations. B2B apps can command hundreds per year, but consumer apps typically need high download volumes to generate meaningful revenue.

The simplest path to profitability is attracting enough users to cover your development costs and generate profit. Understanding those costs helps you set realistic user targets.

App monetization strategies

You can generate revenue from an app in several ways. Your choice depends on your app's purpose, your target audience, and how users interact with it. The most common monetization strategies include:

In-app purchases

Offer users the option to buy digital or physical goods from within your app. This can include extra lives in a game, premium features, or merchandise.

Subscription models

Charge users a recurring fee, typically monthly or annually, for access to your app's content or services. This model provides a predictable revenue stream. Consumers increasingly prefer digital payments, with one survey showing cash is now used for only one-third of their transactions.

Advertising

Make money by displaying ads within your app. You can get paid based on the number of times an ad is shown (impressions) or when a user clicks on it.

Freemium models

Offer a basic version of your app for free to attract a large user base, then charge for advanced features, an ad-free experience, or other upgrades. This can be effective as more people move away from physical money. Research shows about 1 in 10 Canadians now claim to be entirely "cashless."

Sponsorships and partnerships

Partner with another company to feature their brand within your app. This works well if your user base aligns with the sponsor's target market.

Choosing the right monetization model for your app

The best monetization strategy depends on your app type, user behaviour, and business goals. Consider what value you're offering and how your users will want to pay for it.

For example, if your app provides ongoing content like news or fitness classes, a subscription model makes sense. If it's a game, in-app purchases for virtual goods might work best. Analyze your competitors to see what models are standard in your market, but don't be afraid to test different approaches.

Costs of developing an app

App development costs vary widely depending on complexity and platform. Costs vary at different price points.

U.S. app-development company Echobind has created products for hospitals, commodity traders, and gamers. CEO Michael Yared outlines the typical investment:

Web apps are cheaper to produce. You can create a web app that does one thing really well for about $60K. Double that if you want it to do lots of things. And if you want it to live on mobile too, then you're looking at over $200K.

– Michael Yared, CEO, Echobind

These figures represent a significant investment for first-time founders, especially when you include marketing costs. However, a well-defined product targeting a clear market can deliver strong returns. You can also reduce costs significantly if you or your partners have coding skills.

The process of building an app

Building an app follows five key phases, from defining your concept to writing the final code. A methodical approach keeps costs down and helps you avoid expensive changes later.

Yared recommends focusing on your minimal viable product (MVP): the one or two features your app absolutely must have.

"Build only what's essential. Create the MVP at the lowest possible cost. Competitors rarely succeed by releasing a more feature-rich version of your MVP. I've never seen that happen."

Each phase involves the following:

1. Discovery: Define which features are essential and design user flows that make them easy to access. This phase shapes everything that follows.
2. Wireframes: Sketch each page in basic black and white, using blocks to show layout without design details. This keeps focus on functionality.
3. Prototypes: Convert wireframes into a clickable model. The app won't function yet, but you can navigate through it and test the experience.
4. Designs: Transform wireframes into fully designed pages with menus, buttons, and visual elements. Lock in how everything looks and works.
5. Development: Write the code that brings your app to life. You may have tested ideas along the way, but now you're building the complete product.

Make changes early to avoid costly rework. Each phase makes modifications harder and more expensive.

"Discovery is the most important part of building custom software," Yared explains. "Otherwise you risk building a house with the wrong foundations. Changes get 10 times harder and more costly to make with each successive step."

Marketing your app

Marketing determines whether your app generates revenue. It's also part of a larger business trend. In one survey, nearly two-thirds of firms reported making some kind of digital investment. A great product needs visibility to succeed.

Start with beta testing before your official launch. Distribute an early version to test audiences. Gather feedback to improve the product and convert testers into paying customers.

Optimize your presence across channels:

• App store listings: Clearly describe the problem your app solves and include relevant keywords.
• Product website: Create a dedicated page that explains your app's value and drives downloads.
• Search visibility: Use terms your target users actually search for.

After launch

User retention drives long-term profitability. Acquiring your first users is exciting, but keeping them determines whether your app makes money.

Early adopters provide more than revenue. They help you improve the product, attract new users through word of mouth, and build the foundation for sustainable growth.

Yared recommends monitoring performance closely after launch:

See how the app is bearing up to real-life use. Certain areas may be getting more traffic than you'd anticipated, which can slow down performance. Deal with those things. Take note of which features are popular and make those experiences as good as you can. If a feature's going unused, decide if you'll drop it or promote it more so users know it's there.

– Michael Yared, CEO, Echobind

Focus on three priorities after launch:

• Performance: Identify high-traffic areas causing slowdowns and fix them quickly.
• Popular features: Double down on what users love and make those experiences even better.
• Unused features: Decide whether to promote them or remove them to simplify the app.

Managing your app's finances

Tracking revenue and expenses from day one helps you understand whether your app is actually making money.

App businesses have unique financial needs:

• Multiple revenue streams: In-app purchases, subscriptions, and ad revenue may all flow into different accounts.
• Ongoing development costs: Updates, server fees, and marketing require consistent tracking.
• Cash flow timing: App store payments often arrive on delayed schedules.

Cloud-based accounting software simplifies this process. It automatically categorizes income and expenses, tracks cash flow in real time, and generates reports that show your true profitability.

Connect your payment platforms and bank accounts to get a clear picture of your app's financial health. Get one month free and take control of your app business finances from the start.

FAQs on making money from an app

These answers address common questions about app development and monetization.

Do I need coding skills to build a profitable app?

No. Low-code platforms and app development agencies let you build and launch apps without writing code yourself. However, having technical knowledge helps you communicate with developers and make informed decisions.

How long does it take to start making money from an app?

Most apps take three to six months to develop and another six to twelve months to build a user base that generates consistent revenue. Profitability timelines vary based on your monetization model and marketing investment.

Can a small business use an app to increase revenue?

Yes. Apps can create new revenue streams, improve customer retention, and streamline operations. A 2020 survey found that two-thirds of small businesses now accept online payments. Many use apps to offer subscriptions, loyalty programs, or direct purchasing.

What's the difference between a web app and a mobile app for making money?

Web apps cost less to build and work across all devices. Mobile apps typically generate higher engagement and support more monetization options like in-app purchases. Your choice depends on your audience and revenue model.

How do I track revenue and expenses from my app business?

Use cloud-based accounting software that connects with app stores and payment platforms. This gives you real-time visibility into revenue, expenses, and cash flow without manual data entry.