This episode is about the drawbacks of teaching through a marketplace website like Udemy or Skillshare rather than your own platform.
While I’m not meaning to, this may come across as a bit of a rant, my intention is to showcase the value of putting in the work to do your online studio right, from the beginning, or if you really want to use one of these marketplaces, to build in an exit strategy.
The number one reason people start teaching on these platforms is because they have a built in audience and creators believe that it’ll be easier to start making money when they don’t have to worry about marketing.
Did you know that course creators who don’t do their own marketing only make 37% of the course fee on Udemy? It’s true… you’re paying 63% for marketing and promotion. For course sales that you promote, you retain 97%, which is obviously far better than 37%, right? But don’t forget, one of the biggest reasons creators start on Udemy is because they don’t want to market.
In addition to Udemy taking a huge percentage of your sales, courses on Udemy are ridiculously under valued. They are almost all slashed prices, down to somewhere between $15 and $30 from $60 – $300 on average.
If you have a course that is listed at $200 and slashed to $20, you make $7.40 on every sale of this course that comes from the Udemy marketplace and $19.40 from every sale you make directly.
When you’re on your own platform, there are fees like credit card processing which is about the same 3% that Udemy takes plus the cost of the platform you use. But you can charge what the course is actually worth rather than discounting to meet the expectations of the clientele.
Assume your platform is the Thinkific pro plan, at $99/month and that we are able to generate 10 sales of our $200 course each month. That’s $2000, minus the $99 Thinkific fee and the $60 in payment processing fees. Which leaves you with an income of $1841.
Or on Udemy, with the price slashed to $20, we’re looking at $194 for that same 10 students. Let’s be optimistic and say that you’ve done a great job setting your course up and Udemy displays it prominently so that you are able to generate another 50 students from the marketplace… that works out to an additional $370. So your monthly income would be $564 which is one third of the income that you are able to generate for the same amount of effort on your own platform.
I truly want you to benefit from your online courses in as many ways as possible, but most importantly from the financial side. And I don’t believe that marketplaces are the best place to position yourself as an authority.
What we put into our marketing will come back to us. We will attract the best students when we build something that holds true to ourselves.
This is another marketplace but instead of the patrons of the site purchasing individual courses, the patrons become members and are granted access to all the courses on the site. From there, creators are paid based on percentages. It goes something like this… the site pools all the income into a pot and then takes a percentage of that to distribute to the creators, then from there the percentage each creator receives is based on the number of minutes people watched their content. So if the total pool of creator watched content is 10,000 minutes and your courses were watched for 500 minutes, then you will receive 5% of the creator pool.
I don’t even know how to guess actual numbers and potential income for Skillshare… but I do know that it’s hard to figure out how to have a profitable business when there are so many variables outside of your control.
The upfront costs of your own platform may be daunting, I hear that from clients all the time, but Thinkific has a free tier to get started with your first course on.
Once that’s income producing, you’ll have the funds to upgrade to a higher plan.
The other major drawback to marketplace sites is that you don’t actually have a student list. You are not able to market other courses or offers to your students on these platforms. Sure you can do some level of direct messaging, emailing and announcements, but there is no direct relationship between you and your students.
How do we stop relying on Udemy or Skillshare and start building our own email and prospective student list? The same way as any other online course creator… social media marketing, ads, podcasting, blogging, YouTube and so on. Now, I don’t know if you can insert anything into your Udemy or Skillshare course for students to follow you on social media or if that is against the terms of service. I know you can list your website and a few social media accounts on your profile, so that’s at least something you can start with right now. If you don’t have your profile completely built out, go there right after you finish listening to this episode.
The other question is why would someone who is currently paying for Skillshare or your slashed prices on Udemy want to come with you off the platform they are used to learning from you on?
The main reason someone will follow you off the platform is because of the potential growth. Say that your courses that aren’t on Udemy include a feedback loop or a monthly Q&A call, or accountability or personalized practice schedules, then you’re giving them a compelling reason to join you.
It’s really the value of the next step of the relationship. Think back to college, when we were in our 100-level classes, we were in large auditoriums with tons of students. The professor didn’t know our names and couldn’t match our work to our faces. Then we go to 200-level classes and build a stronger relationship with our professors and for that matter our peers. Then by 300 and 400- level classes, we select our classes based on the professors and classmates, not always the other way around.
It’s the same with online classes and programs, first we take what we are initially exposed to and then we invest in the teachings of a specific teacher. Your students will want to follow you, because you’ve made a compelling offer!
I would love to know your thoughts on this episode, it’s a break from what I usually bring to the show and your feedback helps me create the best content for you. Go to http://callwithjaime.com and book a time for us to chat.
Here’s the link to get a free month of the Thinkific pro plan: https://techofbusiness.com/thinkific/