Are Online Courses Profitable?
Online courses have one of the best business models. The reason for this is that you only need to make a course once, and customers will keep paying you months after you publish it. The amount of money you can make from a course varies a lot depending on factors such as your niche, price, and payment style (pay once/pay monthly). Most people who start out make anywhere between $1–5K/month, but there are many examples of well-known creators making $50K+/month.
Factors That Determine Online Course Profitability
The Price Of Your Course
The price of your course is extremely important to your revenue. For example, if you had 100 people paying $50/month, you would make $5000/month, but if you had 100 people paying $500/month, you would be making $50,000/month. The question is, what’s the highest amount you can charge for your course without losing all of your customers?
Your price should reflect the scope of your course, the value it offers, and the niche you’re in. Taking a look at other people in your niche may also help you decide on a price. Finding the “perfect price” is one of the most important factors for the success of your course, but this is also quite difficult to pinpoint. The price of your course is going to be directly correlated to the value it provides, so here’s a model to better help you. Divide your course into one of these three, based on the value it provides.
- Little value provided
For a course that provides little value, expect your market to pay around anywhere from $25–100. Keep in mind that there is a lot of competition on free video platforms such as YouTube, so it must be a large enough course where you can outcompete the free videos. An example of a course like this may be a tutorial on how to use a digital software, which contains at least five videos of quality content, and maybe some PDF files with instructions. - Moderate value provided
This type of course should be priced anywhere between $200–500. These courses will show people how to perform more complex things. An example may be how to run online advertising, including more than ten long-format videos with many details. - Lots of value provided
These courses often solve huge problems, and as a result provide a huge amount of value (often charging $1000+). An example would be a course on how to run a successful online agency, in which the goal would take months to achieve. These courses may include one-on-one tutoring, dozens of videos, exercises, and more, basically a step-by-step guide on how to build a business.
Note: The equation for value is (dream outcome x perceived likelihood of achievement) / (time delay x effort and sacrifice)
Why Would Someone Pay So Much For A Course?
All these big price tags may make you wonder how anyone is buying these courses. Well, it’s simply about how much value the course provides. Let’s say that you spent $500 on a course about marketing your business. If you gained $10,000 profit because of your newfound knowledge, you just made a Return On Investment that was 20 times what you spent. So, the main way you are going to get people to buy your course is by making it seem likely they will get more out of it than they put in.
How To Maximize The Profitability And Value Of Your Course
1. Size Of The Course’s Niche
The size of the course’s niche can dictate how profitable the course will be. If the niche is very general, then the competition will be higher, leading to other courses being higher quality and cheaper. Keep this in mind when creating a course. For example, instead of using the niche, “how to lose weight quickly while still feeling energized,” target a more specific audience, by using a title such as “how to lose weight for senior citizens while still feeling energized.” This definitely limits your audience, but you’ll have much more success because of the lack of competition.
2. Your Audience’s Income
Who your target audience is can greatly impact whether or not they are going to buy an expensive course. For example, if you’re selling a course about how to be a productive high school student, your course may not get too many sales simply because students tend to not have much money. So, try to avoid very young people, or people who have less disposable income. A course on “how to invest in stocks to get the highest return” would have a better market, because the people in this market tend to have money to spend. So, before you finalize your specific niche, make sure you understand your target audience, and make sure you know what they are willing to pay.
3. The Course Topic
A metric to see if your niche is good is if it passes all three of these questions:
- Are you knowledgeable about it?
- Is there a demand for it?
- Is it a profitable niche?
If your selected course passes all three of these requirements, then there’s a good chance you’ve found a successful niche.
4. The Market Size And Competition
Before narrowing down to a specific niche, you should take a step back to the more general subject and do some market research to figure out which subcategory of the general subject would be the best fit for you. You can do this by looking at your competitors’ success rates, and also by using websites that track Google searches to figure out how many people per month search for your niche.
5. Your Personal Brand Recognition
Having social media related to your brand can be a huge advantage when directing people to your course. This is because when you release a course, you already know that some of your loyal followers will buy it, immediately giving it some momentum. Having an already existing audience will build your course’s momentum because people who know nothing about you will be able to see how many people have already used your course. This will help build trust and eventually lead to sales. A great example of this scenario in practice was when Chris Hemsworth created his own fitness app; the app started out with mostly fans, but then began to spread to people who bought it purely for the workouts included.
6. Your Level Of Expertise
Pick a niche that you have unique experience in, to help you separate yourself from the rest of the competition. Being knowledgeable will also allow you to create higher quality content, which will give you a better reputation, which in turn will lead to more sales. Just make sure you either pick something you already know, or make sure you’ve done heavy research before you teach in your course.
7. The Content Of The Course
Include tips and hacks that have worked for you in the past, and don’t be afraid to go into deep detail on topics. The more content and lessons your course provides, the more value it brings.
8. The Effectiveness Of Your Website
Make sure everything is extremely simple and straightforward on your website. You can hire someone to design the website for you, or you can research the best way to organize it yourself. Either way, it is extremely important to have a well-made website as it will increase your customers’ trust and comfort when buying your course.
9. Your Marketing And Sales Experience
Although having a quality course is extremely important to your success, being good at marketing and selling your course is also very important. You should take advantage of every opportunity you can to look more appealing to your customers. If you don’t have any experience in marketing or sales, make sure you research this so that you don’t get buried by competitors.
What Are The Most Popular Online Course Niches?
The most popular courses right now are in the following niches:
- Web development
- Data analysis
- Graphic design
- IT certifications
- Programming languages
- Personal development
- Artificial Intelligence
- Arts and crafts
- Health and wellness
While it’s important to recognize the niches that are in highest demand, you must also take into consideration how much competition each niche has, and the profitability of each niche.
How To Monetize Online Courses
1. Sell On A Personal Website
Create a professional website that you can direct your customers to. This website can sell your courses separately, or in bundles. A bundle is when you sell your courses together for a discount. If you plan on creating multiple courses, you can create a membership plan for people to access all of your content. The membership strategy works best if you upload content regularly and if you have, or plan to have, a loyal following.
2. Sell On A Marketplace
Selling your course to a marketplace is a great way for people to find you, but you have less freedom and may feel restricted to the platform you’re uploading on. Some of the best places to upload your courses to are Thinkific, Teachable, Kajabi, and Skillshare.
If you already have an audience, or plan to create a long-term business out of making courses, then creating a website might be your best bet. But if you don’t have an audience, then uploading your course to an already existing platform might be better.
Other Ways To Increase Your Income From Online Courses
1. Advertising
This is a great way to increase income. Ideally, you’d want to make back between two times to ten times as much money as you paid for the advertising. If you have multiple courses or any other products, you might want to take into consideration if advertising certain courses leads to more sales in your other products as well.
2. Tiered Membership
If you are uploading to your own website, consider creating a membership system so that people can access your content through a monthly or yearly plan. This works well if you are constantly uploading new content. You can also divide the membership program into tiers, with the lower tiers costing less but also revealing less content, while the higher tiers show more content.
How Long Does It Take To Build An Online Course?
After all these steps, you may be wondering: how long does it take? Well, if you’re creating a short course, it may take only a few days. But if it is a business you are trying to build, then it will most likely take months to build.
Conclusion
Whether you are creating a course as a side income stream, or as a full-time business, it’s extremely important to use every advantage you can in order to outperform your competition. This is why researching and devising a plan are some of the most crucial parts of creating a course. And although it might seem overwhelming at first, just focus on the basics, take it step by step, and if you really focus on creating something valuable, sales will come.
