Is building a Competitor to AppSumo a Good Opportunity?

Three weeks ago, I tweeted about whether building a competitor to AppSumo would be a good idea.

If you're not familiar with the site, AppSumo is a website where you can buy software tools for your business at very low prices.

According to recent reports, AppSumo has over 1 million users. These users are primarily entrepreneurs, small business owners, and professionals looking for affordable software solutions.

Now, let’s return to the post.

As you may know, AppSumo takes a huge commission, about 70%, on each sale made.

70 percent! 🤯🤯🤯

A product is the result of a creator's hard work and dedication. They’ve worked really hard to build it, and when they finally launch it, they receive just 30% of the revenue?

Creators be like:

This seems very low, especially with all the context as they offered a big discount to their SaaS. Then it’s way less than 30% than their regular prices they earn.

In my opinion, creator should deserve more. So, is building a competitor to AppSumo a good idea?

Here are some things you should consider to help you make this decision.

1. If you know how to drive big traffic, then you stand a chance to compete with a giant like AppSumo.

AppSumo is all about distribution. Their promise is to bring a lot of sales through their extensive marketing and sales funnels.

So, if you can attract a large number of people and develop a more effective distribution channel than AppSumo, you can build a successful product.

2. Another way to succeed is by targeting a different market.

AppSumo is well-known in the USA, but not as much in France, for instance (although there are other local factors). You could focus on a specific country and list softwares related to that country in the same language.

Instead of trying to compete with an established product in a saturated market, entering a new market where it doesn’t exist will be cheaper and more profitable, as many marketing costs will be saved.

But if you do not have any of these, then DO NOT try to build an AppSumo competitor.

Also, I want to thank everyone for sharing their different points of view on my post on X. It was interesting to read all your comments.

Fun fact: After my tweet went viral, I received Noah Kagan’s (AppSumo CEO) box with his book : Million Dollar Weekend.

You also shared, two interesting facts to know:

• AppSumo creates contracts with each company listed to get deal exclusivity for a period of time (one year, from what I read).

• Depending on the option you select, the 70% commission can drop to 30%.

It seems like many people have thought about building a competitor. Some tried and failed—it's definitely hard to compete with a giant like AppSumo.

You might be wondering why I’m not personally launching such a product.

At the moment, I’m not sure I have a sufficient distribution and motivation, and mainly, I can't focus on this business right now.

Even if I do build such a product, a challenge will be collecting the deals.

But I see many deal directories on the internet and if so many exist it might be because it’s lucrative with affiliation. Yet, I don’t have any official stats and wonder how they perform. Most of them are scams with fake codes. I don't want such behavior with one I could create.

However, once I get the distribution sorted, I might create a basic version using my Nextjsdirectory to list deals.

The build part is a no-brainer, and it’s super easy to use, but the traffic will be key to get decent revenue.

I hope you enjoyed this post, let me know if there’s particular topics you would like me to write about.