I started teaching online in 2011. Within one year I was ranked 6th in top earnings within Udemy with only one course published.
I spent 4 weeks producing that course and made $96K that same year with zero marketing.
Udemy did everything. They spent thousands of dollars promoting my course.
Those days are over. Now to keep a similar level of income I’ve had to create 9 more courses and spent 10 times more effort in marketing.
In other words, it’s at least one order of magnitude more difficult today to break 6 figures a year selling online courses that it was 6 years ago.
This happens with all growing markets. They become saturated. The product becomes a commodity and is devalued.
How devalued? about 10X. On my first year on Udemy my average income per course sold was $57. Today is $5. That means to make the same income I’d need to sell ten times more courses.
Udemy sells over 97% of their courses for about $10 and they keep 50% of sales generated via their marketing efforts.
Is it worth to spend 1 month creating a 5-hour online course to sell it for $5 a piece?
It depends on how fast you can recoup your investment in cash and labor.
Ideally, you want to recoup all your investment within the first couple months after launching your course.
What does this look like in actual numbers?
A typical 5-hour online course will take you at least 100 hours to produce.
That will include researching, validating, outlining, recording, editing, uploading, creating a sales page, and a promo video.
If you valued your time at $25 per hour of labor, then your investment to create the course will be $2,500.
Assuming you launch it on Udemy, you’ll need at least 500 sales to recoup your investment as most Udemy generated sales will make you only $5.
The problem is that, unless your course is of outstanding quality on a high-demand topic, it’s very unlikely that Udemy will generate 500 sales anytime soon. (I have 2 courses on Udemy over 2 years old with less than 300 sales because they covered very low-demand topics)
So how do you recoup your investment?
One: Make sure you can create an outstanding course on a high-demand topic.
Two: Invest time and money to do your own marketing and generate sales on your own.
Three: Charge more per course.
To be successful on Udemy today, you’ll need to do One and Two very well.
To be able to do Three – charge more per course – you’ll need to self-host your online courses.
Because it has gotten so much more difficult for course creators to recoup their investment on marketplaces like Udemy or Skillshare, most top online instructors are choosing the self-hosting route using a platform like Thinkific or Teachable.
So 6 years ago you only had to worry about creating an awesome online course. Today, you have to create an awesome online course, learn how to market it, learn how to host it, and invest in all the required infrastructure to do so.
Hard Doesn’t Mean Impossible
After learning this reality, I may have discouraged you to ever attempt to create an online course. And if you were thinking creating an online course was a sure path to everlasting easy money then you should be discouraged and look for an alternative (Gambling? Bitcoin? Cookie stand?).
An interesting case study of a former Udemy instructor that is thriving on his own, is that one of Jerry Banfield. Jerry is a bit of an oddball (he got kicked out of Udemy) but there is no question that he is one of the hardest working instructors I’ve ever encountered.
Here is a recent video where Jerry shares his online income reports and explains why he decided to self-host his courses on Thinkific (I find him more watchable at 2X speed).
Phil Ebiner is another great case study of a top Udemy instructor (with over 400,000 students on Udemy) that has invested heavily in marketing to drive sales to his courses on Teachable.
So What Is Everything You Need To Succeed Creating Online Courses Today?
The answer is pretty much all the things required to build any successful online business.
That includes a reliable way to attract customers (sales funnel), a good product (awesome online course), the right infrastructure and tools to keep the machine going and growing (marketing software, hosting platform, payment processing, accounting software, recording equipment, etc.), and lots of time, passion, and patience.
The entire list of everything you’ll need to build a business selling online courses is in this spreadsheet HERE.
That list is a work in progress (over 70 line items and counting) but it will give you a very accurate picture of all the tools and labor required to get to $5,000 per month in gross revenue selling online courses.
Next week, I’ll create a video tutorial explaining how to read and interpret the spreadsheet so you can apply it to your own specific situation.
Peace, love, and Banfield cookies.
P.S: This week’s winner of an official Grumo t-shirt is… Kelly Belanger! (please reply to this email with your shirt size and address)
P.2: Did you miss last week’s email? No problem you can read it HERE.
P.3: This message took about 6 hours to write (including the creation of the spreadsheet).
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