Jen Nikolaeva
Revenue growth and marketing · 8 MIN · 20.11.2024
Is selling courses online profitable?
With today’s digital age education doesn’t miss out on the opportunity to reach wider audiences through online courses. The market value for EdTech for 2023 is reported to be over $200 billion and growing by over 12% in the next decade.
Increasing global demand for online education makes this niche pretty attractive for starting your business in selling online courses. Let’s see how to create a profitable online course and what strategy to keep in mind while doing it.
Increasing global demand for online education makes this niche pretty attractive for starting your business in selling online courses. Let’s see how to create a profitable online course and what strategy to keep in mind while doing it.
Advantages and challenges
Advantages
There are several benefits of online learning.
- Mobility is what makes learning flexible;
- Scalability helps you reach a broader audience globally;
- Cost-effectiveness lets you create courses on a small budget;
- Taking your courses online helps you adapt the material to different learning styles;
- Knowledge-checking becomes interactive and engaging;
- Supporting your students through chats helps you keep learners motivated;
- Analytics tools give you insights on course performance.
Challenges
However, let’s not forget about the challenges you may face while creating a for-profit learning.
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Competitive market. The EdTech market is quite full of general courses such as programming, personal development and fitness. Competing with such popular platforms as Coursera is a big challenge. Focusing on a unique niche or a specific audience and making valuable content can help you overcome this challenge. -
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Initial investment. Making your course stand out by creating high-quality content can bring certain expenses. Learners might anticipate high-resolution video, clear audio, and engaging visuals. Poor production and a lack of good LMS tools might lead to negative reviews or even refunds. If your course suggests having videos, make sure to invest in good quality equipment such as a camera, microphone, lighting, and production team. -
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Student retention. Student retention, repeat course purchases, and referrals are the backbone of maintaining cash flow. With an average conversion rate for online courses of 2-5%, you need to make sure the ones who buy your courses stay with you. Keeping your hand on the pulse and updating your course once the information is outdated is crucial to stay alive and competitive. Also adding new modules and refactoring courses based on students’ feedback is what can help you here.
How to make money selling courses?
So, how does one make money selling courses? Let’s take a tour through some important points.
Choose the right niche
Choosing the right niche means choosing a profitable niche.
Start with your expertise and passion
List out your skills and area of expertise, professional experience, hobbies, and subjects you’re passionate about. Picking something you’re very familiar with will bring you confidence and your course authenticity.
Identify what problems you can solve
People buy something when it solves their problems, satisfies their needs, or helps them achieve goals. The more urgent the problem, the more people are willing to pay. Research challenges your potential students face, look for gaps in existing offers on the market, or even interview people. Understand what issues you can help them solve with your expertise.
Analyse market demand
In order to generate sales, you need to know the niche you’re choosing is in demand. You can use tools such as Google Trends to see if the topic you want to create a course on is gaining or losing popularity. Analyse competitors and see how many courses on your or similar topics are there. You can also look for discussions on forums to see if people are interested.
Assess competition
Too much competition can make it harder for you to stand out, especially with such online course giants as Coursera, Udemy, and Skillshare. Look for gaps in big players’ courses and assess whether you can compete with them.
Evaluate the payability of your target audience
Sometimes people will hesitate to pay for something available online for free. Make sure your topic niche is not widely accessible and attracts an audience with high purchasing power. Conduct surveys or pre-sell your course to test potential students’ payability.
Choose a long-term niche.
This one is pretty simple — if the topic you chose will lose its trend soon, you won’t make much profit off of it.
To sum it up, understand demand, value, competition, and monetisation potential.
Define your target audience
To understand your potential learners, answer these questions:
These questions can help you navigate through creating the concept as well as the course content itself.
- Who needs my course? (organisations, students, young moms)
- What are their pain points? (lack of certain expertise, accessibility, affordability)
- What motivates them? (career advancements, certifications, self-improvement)
These questions can help you navigate through creating the concept as well as the course content itself.
Create your value preposition
Why do people need to choose YOUR course? What’s so special about it?
Your offer needs to stand out among your competitors and actually say “value” to your learners.
Your offer needs to stand out among your competitors and actually say “value” to your learners.
For example, 24/7 online tutor support can be a great advantage for an online course, although it's hard to make it a reality for a small online course. Having a supportive online community can also be a valuable point when choosing a course.
Develop your course
Recent research from IBM's Cost of a Data Breach Report 2023 reveals:
Create a go-to-market strategy
Whether with a marketing specialist or just by yourself, you’ll need to create a strategy for putting your course on the market and sustaining its’ marketing throughout its lifetime.
Offer MVP (minimal valuable product)
by just starting with one or two courses. This will not only help you test the market but also save you money if the niche you chose needs a bit of a change.
Choose an LMS (Learning Management System)
for your course. Make sure to choose one that will not cause more problems to your learners, but will have a friendly user interface, a mobile version, and variety of learning activity possibilities. A good example here would be Seturon LMS.
Choose marketing channels
such as social media, email marketing, content marketing (blogs, webinars), or even partnerships with schools or businesses.
Choose a pricing strategy
Research prices for similar courses on the market and set yours. Understand what monetisation model suits your course best:
Keep in mind that underpricing may devalue your course in the eyes of buyers, and overpricing can lead to losing potential students.
- Freemium (offers the first chapter of the course for free)
- One-time purchase
- Subscription (students pay a monthly fee for accessing your content)
- Pay-as-you-go (learners can pay for modules as they progress through the course)
- Certification fee (learners are offered to get a certification from you to acknowledge their skills)
Keep in mind that underpricing may devalue your course in the eyes of buyers, and overpricing can lead to losing potential students.
What are the costs and profits of creating an online course?
To understand the profitability of selling online courses, we need to make some calculations first.
Course development
Let’s say we will put together a team of an instructional designer, a subject matter expert (SME), a video producer, and a graphic designer. Let’s calculate the medium cost of our team per Germany's average hourly rates.
- Instructional designer
40 hours, €25/hour
Designs the structure and content of the course, and manages learning materials on LMS - Subject Matter
Expert
25 hours, €40/hour
Provides expert knowledge - Video
producer
15 hours, €15/hour
Includes filming, editing, and adding visuals - Graphic
designer
10 hours, €15/hour
Creates engaging visuals for banners and course materials
Estimated total cost per the whole team: €2,375 per course.
Digital platforms expenses
In order to host all your materials you’ll need an LMS platform and course creation tools.
Let’s consider that our LMS has a video hosting option and we don’t need a separate one.
Let’s consider that our LMS has a video hosting option and we don’t need a separate one.
- LMSPrices here will vary, let’s take an average. €850 per year.
- Content creation toolsNot particularly necessary, but if you plan on creating engaging content and quizzes, you might want to purchase an Articulate 360 subscription (or similar tools). Let’s consider we take a free trial for now, to understand whether we need the tool. Free trial per month.
- Marketing expenses
- Social media ads: Campaigns on Facebook or Instagram might cost €350/month (€4200 per year).
- Content marketing: Blogging can cost €750/month if outsourced (€9000 per year).
- Email marketing software: Tools like Mailchimp or ConvertKit charge around €50/month (€600 per year)
Estimated cost per digital expense: €13,800 a year.
Setting a price and calculating ROI
Once we’ve calculated our expenses, we now can proceed to our next step — pricing.
- Pricing Your Course
Course prices typically range from €50 to €500, depending on the niche, value, and target audience.
For example:- A complex niche 1-year long course targeting professionals might sell for €8000.
- A general skills course (e.g., basic coding) might sell for €50-200.
Let’s say our course is a general one. If we are only selling one course during the whole year, our expenses will be €16,175. If we price our course at €200, to break even we will need to sell it to 80 students.
If we aim for 100% ROI (doubling our investment), we will need to sell our course 160 times. - Profit Scenarios
Here’s a simplified example:
Initial investment: €16,175
Course price: €200
Marketing Budget: €4,200 (for ads targeting 8,000 people with a 2% conversion rate)
Estimated Revenue:
2% conversion of 8,000 views = 160 sales
160 x €200 = €32,000
Profit:
Revenue (€32,000) – Total Costs (€16,175) = €15,825
The profit can increase with effective marketing, repeat purchases, and referral programs.
After leading your first course to success you might want to repeat the cycle a bit and scale your online course into multiple online courses, growing your EdTech business. Diversifying your course catalogue will allow you to bring more audiences to your business and establish yourself as an authority in your niche.
Remember that growth doesn’t mean creating more and more courses. It's about making the learning experience better, keeping up with new trends, and using feedback to improve your course.
FAQ
The global EdTech market value exceeded $200 billion in 2023 and is expected to grow by over 12% annually in the next decade. The increasing demand for online learning makes it an attractive and profitable niche for entrepreneurs.
- Flexibility: Students can learn anywhere, anytime.
- Scalability: Reach a global audience with minimal effort.
- Cost-effectiveness: Create courses with a small budget.
- Adaptability: Cater to different learning styles.
- Engagement: Interactive tools keep students motivated.
- Analytics: Insights on course performance and areas for improvement.
- Competitive market: Standing out among giants like Coursera or Udemy requires a unique niche and high-quality content.
- Initial investment: Equipment and production costs can be significant.
- Student retention: Continuous updates and student engagement are key to maintaining course popularity and sales.
- Leverage your expertise and passion.
- Identify problems you can solve for your audience.
- Research market demand using tools like Google Trends.
- Analyze competition and find gaps in existing offerings.
- Test your audience's willingness to pay for the course.
Ask yourself:
- Who needs my course? (e.g., students, professionals, parents)
- What are their challenges? (e.g., lack of skills, time, or resources)
- What motivates them? (e.g., career growth, certifications, self-improvement)
Highlight unique benefits your course offers, such as:'
Your value proposition should clearly explain why your course is worth the investment.
- Personalized support.
- Exclusive content or community access.
- Certification opportunities.
Your value proposition should clearly explain why your course is worth the investment.
- Define the course structure and content.
- Develop engaging materials like videos and quizzes.
- Choose an LMS platform for hosting your course.
- Test your course before launch to ensure quality.
- Start with an MVP (minimal viable product) to test the market.
- Use social media, email campaigns, and content marketing.
- Partner with businesses or educational institutions.
- Choose a pricing strategy that reflects the value of your course.
- Freemium: Offer the first chapter for free.
- One-time purchase: Students pay a flat fee.
- Subscription model: Monthly payments for ongoing access.
- Pay-as-you-go: Students pay per module.
- Certification fee: Charge for optional certification.
Ensure your pricing aligns with your target audience's expectations and purchasing power.
- Team expenses: Hiring professionals like instructional designers and video producers.
- Digital platform costs: LMS subscriptions and content creation tools.
- Marketing expenses: Ads, blogging, and email campaigns.
For example, the total initial investment might range from €16,000 to €20,000 depending on production and marketing efforts.
Determine your expenses (e.g., €16,175), set a course price (e.g., €200), and estimate sales. To achieve a 100% ROI, sell the course to 160 students. Effective marketing and retention strategies can significantly boost profits.
- Expand your course catalogue to target different audiences.
- Update and improve existing courses based on feedback.
- Stay ahead of trends in EdTech and adopt new technologies.
Growth isn’t just about quantity; focus on delivering exceptional learning experiences.
- Jen NikolaevaLearning Experience Designer and EdTech Producer
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