It seems like everyone is talking about creating online courses these days, and for a good reason. Online education was already in high demand before the pandemic hit. Now, the demand has intensified with parents looking for supplemental education for their children and adults eager to learn new skills to stay competitive in a fast-changing economy.
People are looking for online courses on almost every topic imaginable — bread making, investing, urban gardening, meditation… the list goes on. If you have technical or creative skills, special knowledge, or the ability to help others solve their problems, you too can create your very own online course.
Amateur online course creators earn anywhere from a few hundred dollars a month to over six-figures a month teaching what they know in an online video format.
If you have decided that you want to create an online course, the next question that you may have is whether you should sell it using an online course platform like Udemy or whether you should set up your own online school that you control using a program like Teachable or Thinkific.
When I set out to create my first online course in 2011, online course software didn’t exist yet, at least not in the way that it is today.
Back then, you had to know how to code to set up a website. Today, setting up your own online school is as easy as uploading images, dragging and dropping design elements, and typing text into a page editor.
Since I didn’t have advanced coding knowledge, I decided to create and sell my first course using the popular online course marketplace, Udemy.
I’d been dabbling in blogging, self-publishing on Amazon, creating affiliate websites, and a handful of other online business ideas when I came across an article about an online course creator who had just made a million dollars selling courses on a new website called Udemy.
Udemy allows anyone to create online courses for free and sell them on their platform.
They take care of all of the technical aspects of running an online course like video hosting and processing payments. They even promote your course to their student community for a percentage of the sale.
Back then, the site was still new, so the number of instructors was limited. The competition was low, and the number of students eager to learn new skills online was growing.
It was a content creator’s dream.
Until it wasn’t.
Hard Lessons Learned
When I began creating online courses for Udemy, my course topics ranged from technical tutorials on how to use various software tools to legal and regulatory issues for businesses (I’m an attorney by trade.)
I had been told that Udemy was a “high volume” game. If I wanted to succeed there, I would need to create a lot of courses. Oddly enough, this didn’t scare me away.
I get a lot of enjoyment from experimenting with ideas, even if success is guaranteed right away. For three years, I buckled down and created dozens of online courses for Udemy in my free time. It became my obsession.
My goal was to eventually earn enough each month from online course sales to cover my living expenses to start my own business and quit my job. Most months, I earned a couple of hundred dollars selling my courses on Udemy.
While I was grateful for the extra income, I was light-years away from reaching my goal of making a living from my creative pursuits. If I wanted to reach my goal, I needed to stop what I was doing and try a different strategy.
The Online Course Income Equation
Just to be clear, this article's goal is not to discourage you from creating courses on Udemy, but rather to show the contrast between various course creation and sales strategies that are available to all of us.
For the record, Udemy is a great place for new course creators to test ideas and build confidence.
There are still some course instructors on Udemy who are earning over a million dollars per year. However, that seems to be the exception rather than the norm.
Udemy technically allows you to set the price of your course between $10 and $200. However, if you want Udemy to market your course to their student community, you must opt-in to their “promotional program.”
If you do this, Udemy will sell your course at an extreme discount — usually between $9.99 and $13.99 — regardless of the price you set. If someone buys your course at a discounted rate, your cut is 50%. Essentially, you’ll earn $4.99 to $6.99 per sale.
If someone clicks on a Udemy ad or was referred by a Udemy affiliate partner, your cut drops to 25%, in which case you would earn $2.49 to $3.49 per sale.
If your goal is to earn $5,000 per month in course sales, you would need to enroll between 715 and 2,008 new students into your Udemy course(s) each month.
Yes, you can opt-out of Udemy’s promotional program, but you should know that most people buy from Udemy because of the deep discounts. They have been trained to expect it.
So, while it’s not impossible to get someone to buy your course on that platform for $100-$200 if someone else is offering a similar course priced at $9.99, what do you think your chances are of winning the sale?
Basically, if you want to succeed on Udemy, you either need to have many courses or teach topics that are in extremely high demand on the platform.
The Upside of Udemy
As I mentioned earlier, Udemy is a great option if you don’t want to be bothered with doing your own marketing and do not want the responsibility of running the day to day operations of an online school.
In this respect, Udemy is a great place to experiment with ideas for different course concepts. For example, when I get an idea for a new course, I will often create a “lite” version or a “minimum viable course” and upload it to Udemy to see how it performs.
If there is a good amount of demand for the topic, I will often use the feedback that I receive from the students to create a more robust course that I sell on my own online teaching site.
While Udemy is a good option for new course creators to gain experience, test out course ideas, and even offer “lite” versions of their larger programs, those who want to create a profitable online course business that they have total control over may want to consider hosting their courses on their own private website.