Udemy’s New Pricing Model: How To Use It To Your Advantage As An Online Instructor

Thinkific TeamCourse Marketing15 Comments

Udemy pricing advantages

Udemy pricing advantages

Big news from Udemy this week. Starting April 4th, 2016, the price of all courses published on Udemy’s platform will be capped at $50 (click here to see their official announcement). This was a big decision for them to make, one that will likely affect thousands of online instructors who are selling their courses on Udemy’s platform.

One of the biggest concerns current Udemy instructors have is how this change will impact their sales. After all, many courses on Udemy are currently priced at several hundred dollars (up to a maximum of $300). With the new changes, they’ll be forced to bring it down to the same price as other courses.

Understandably, many instructors are upset about this. In this post, we’re going to look at the arguments for and against Udemy’s pricing changes, and then talk about how you can actually use this to your advantage if you’re an online course instructor on Udemy.

Note: If you can’t read the full article right now, download our workbook on using Udemy’s new pricing to your advantage.

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Big changes to the pricing model at #Udemy. Here's how to use it to your advantage. #teachonline Click To Tweet

Why Udemy changed their pricing

The short story is that the majority of Udemy students never pay full price for a course. Here’s what Grégory Boutté, the VP of Content at Udemy said about their current pricing model:

“Today, prices are inconsistent and complicated for students. List prices range from $9 to $300, but the reality is that 90% of sales occur with a coupon code, and at a price less than $50.”

Since its inception, Udemy has been notorious for running promotions with large discounts on their courses. In fact, it is not uncommon for them to promote courses at 80% or even 90% off to their database of customers. In doing so, they’ve basically trained their customers to never pay full price for a course. Instead of paying full price, most customers simply wait to receive an email with a promotion before making a purchase.

Their new pricing model will help put a stop to that since they will also be changing their discount policy:

“Course discounts, for both Udemy coupons and instructor coupons, will be capped at 50% off; we will also continue to support free coupons.”

This data is backed by other top instructors on Udemy, who agree that the massive discounting was a problem. John Colley, who teaches courses on entrepreneurship and business strategy, thinks that the new policy helps solve that problem.

“I think Udemy is repositioning itself, in the market, to get away from this very heavy discounting strategy. And that is only going to be a positive thing for instructors.”

Scott Duffy, another big proponent of the new changes, agrees that once the massive discounting culture goes away, instructors will start seeing more impulse purchases at full prices.

“We should start seeing students come to the site and just buying things. Not looking for a coupon, not looking for sales or bookmarking a course, but seeing something they want and buying it instantly. It will take some time for that to develop.”

Phil Ebiner, who sells his courses for $300, never gets organic sales at that price. So he actually decided to test out the new pricing by dropping his courses to $25, and he started seeing more organic sales from them.

“By decreasing the course prices to under $50 and limiting it to just 7 options between $20 and $50, instructors will have a better idea about how much to charge, just based off of the limited options. Students should feel more comfortable to buy courses whenever, and not just during sales. I’m excited about the next price changes and feel like it was the best option for the long run of Udemy’s success (and the success of instructors).”

Why some instructors don’t like the new pricing

Now, it makes sense that a $50 cap won’t negatively affect course sales for those who never make full-price sales anyway. However, there’s a section of instructors who actually make full price sales of their courses (at $300), and it’s these instructors that aren’t happy about the changes.

James McAllister is one such instructor. He teaches courses on online business and entrepreneurship, and he consistently makes sales at his price point of $197. When we spoke to him, this is what he said –

“The problem with Udemy’s new pricing approach is that it completely disregards the segment of Udemy’s instructor base that brings their own customers to the platform. Some of us have spent months or even years building credibility with our following and can justify the higher price point – not only because our following has been engaged with us for so long, but because we actually know how to sell the value of our courses.”

Simon Kloot, a professional trader who creates high-quality financial trading and investment courses, says that selling his courses at $50 or less would actually lower its perceived value. Many similar courses are worth thousands of dollars and Simon has found success selling his courses at Udemy’s maximum allowed price.

“Selling my course for $50 or less actually cheapens the content and people start to question whether it has any value at all. The thing is, unlike some of the free or extremely cheap financial courses on Udemy, I am not directing traffic to a more expensive course. What you see in my course is the whole package on how to trade from beginning to end. It is why I only ever wrote one course and why I feel it has more value than a whole series of courses that some instructors seem to churn out.”

Simon has a really good point because we’ve seen how pricing plays a huge role in buyer’s psychology. Higher priced products are typically seen to have more value than cheaper products. That’s why people prefer to pay hundreds of dollars for an authentic iPhone, instead of a cheap knock-off.

Higher priced courses have a higher perceived value than cheap ones. #teachonline #onlinecourses Click To Tweet

Another major consideration is that online courses are not completely passive. The really good instructors have assignments and quizzes, and are constantly in touch with students, coaching them through the course. As Leilani Joy says, this takes up a lot of time.

“On Udemy, I was offering a 6 week art school training course, that requires me to work directly with students and provide hands-on critiques of assignments. $25 per student ($50 subtract Udemy’s 50% cut) is not even minimum wage for my time.”

This is the reason why millionaire course creators like Marie Forleo and Ramit Sethi don’t use Udemy, and instead, opt for their own branded site. They’ve spent years building credibility and thousands of dollars (hundred of thousands in Ramit’s case) on creating impeccable courses. Plus, the attention they give to each student is worth far more than the $25 they’ll receive from Udemy. It would simply ruin their business.


What’s the verdict?

Clearly, there are pros and cons to the new pricing model. Some instructors say it will help bring in more organic sales while others correctly point out that it will devalue their advanced courses.

So the big question is are these changes good news or bad news for Udemy instructors?

The answer is it depends.

If your goal is to generate a significant income by selling courses on Udemy, you’re going to have to sell a lot of courses to make that happen. Udemy is simply not the place if you want to make it to the level of Marie and Ramit.

But if your goal is exposure, publishing your course on Udemy does have some advantages…

If your goal is exposure, there are some benefits to selling your course on #Udemy. #teachonline… Click To Tweet

How to use Udemy’s pricing model to your advantage

If you’re a current instructor on Udemy, this change to their pricing model isn’t necessarily bad news. Yes, you won’t be able to make more than $50 from a single sale of your course, but just because you can’t sell your course for more than $50 doesn’t mean there is no reason to publish a course on Udemy.

Udemy is a very large platform, with millions of students from around the world. So there is value having a presence there, at least from a personal branding standpoint. Publishing a course on Udemy gives you exposure to hundreds, maybe even thousands of potential students whom you would not have been exposed to otherwise. For that reason, we’re not going to tell you not to publish any courses on Udemy.

How to use the new pricing model at #Udemy to your advantage as an online instructor. #teachonline Click To Tweet

Here is what we will tell you: if you’re going to publish your course on Udemy, publish the beginner version of your advanced course. For example, if you have a course that contains over 7 hours of video training (along with mentoring, personal support, access to your private Facebook group, and other things) that you can confidently sell for several hundred dollars, publish a version of that course that does not have the additional mentoring and bonuses and sell it on Udemy at a much lower price.

This way, you get exposure on their platform without giving away all of your valuable knowledge, support, and expertise for an inexpensive price. And you still make a bit of money too. Heck, if all you care about is the exposure, you could even make your Udemy course available for free. If the students who take your mini course want to take their learning to the next level, invite them to check out your longer, complete version of the course (just make sure you do so without violating Udemy’s terms of use).

Many of the top instructors on Udemy, like Sarah Cordiner, Vanessa Van Edwards, and Johnathan Levi follow this strategy. Sarah publishes mini-courses on Udemy just for the exposure, and then upsells them on her full course, hosted on her own branded website (powered by Thinkific).

Sarah Cordiner

As Sarah says in her Facebook comment, Udemy is a marketplace and not an LMS (Learning Management System aka online course platform). While you can make money on it, that’s not the point of it. The point is to get exposure to a huge audience and grow your brand. It’s really a marketing channel.

Once you have that exposure, and you’ve built up a brand, you can bring your audience over to your custom branded site they can buy your higher-priced courses.

The point of #Udemy is to get exposure, not to make money. #teachonline Click To Tweet

What if you want to sell your online course for more than $50?

What do you do if want to charge more than $50 for your course?What if you want to charge $300? $500? $1,000? If you’re like James, Simon or Leilani, you might already have a full-fledged course and you don’t want to create a mini-course just for Udemy. Your course deserves to be sold at a higher price. In that case, the simple answer is: don’t publish your course on Udemy.

You’ve likely spent years acquiring the knowledge and skills that have enabled you to create your course in the first place. If you provide enough value in your course to justify and confidently charge a higher price (a price that customers are willing to pay), then you should most definitely have the freedom to charge whatever you want. That is the basic premise of a free market economy, isn’t it?

If you want to sell your online course for more than $50, don't publish it on #Udemy. #teachonline Click To Tweet

Instead, use a platform like Thinkific, where you have full control over your courses, students, and pricing. No one is going to stop you if you want to charge more for your course. You can create a $2,000 course like Arel Moodie, and sell it with a 6-month payment plan of $375/month.

The bottom line

At the end of the day, Udemy is a marketplace and they get to control your students and prices. That’s their business model and they can change it if they feel like it helps their business, their instructors, and their students. Only time will tell whether this move makes sense.

Fortunately, you as an instructor have an option. You don’t have to stay with Udemy if you don’t want to. At the same time, you aren’t in a contract with Udemy, meaning you can sell your courses there as well as on your own site with your own pricing.

Our verdict? You don’t have to pick one or the other! Use Udemy as a marketing channel to drive traffic to your branded site where you can create a real business. With Thinkific, you can create your branded site in less than an hour!

Create and sell online courses with Thinkific

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  • Sarah

    Based on Sarah Cordiner’s post, you say “Once you have that exposure, and you’ve built up a brand, you can bring your audience over to your custom branded site they can buy your higher-priced courses.”

    I don’t think you can outright sell classes that are sold elsewhere and I know you can’t get a distribution list of your Udemy students, so you could you please give some advice and pointers on how to best accomplish the goal of bringing your Udemy audience over to your custom barnded site?

    Thanks.

    Sarah

    • Thinkific Team

      Hey Sarah,
      You’re right, you can’t outright sell your premium course on Udemy, and the students belong to them, so you can’t get their email addresses. But you can brand your videos, and what I do is watermark mine with my logo and URL. You can also mention, in your Udemy course, that you have a blog where people can go to for more information. When Udemy students visit your blog, you can capture their email addresses with a pop-up. Hope that helps!

      • Anonymous

        Yes, it does. Thanks.

  • Unfortunately, opportunities to “upsell” or exploit your Udemy exposure and bring their students to your own site are very, very, very limited and roundabout.

    I don’t believe Udemy would be OK with an instructor even mentioning in their Udemy course that they had a more advanced course available outside of Udemy.

    So while I agree with much of the analysis here, I don’t think the recommended “upsell” solution can be implemented with significant success.

    Marcia Yudkin
    Udemy and Thinkific instructor

    • Thinkific Team

      Hi Marcia,

      You make a good point. Udemy’s policies do make it quite difficult for their instructors to directly promote courses they have on other platforms (which makes sense, since Udemy doesn’t want its instructors encouraging students to buy from them outside of Udemy). For that reason, the best place to market and up-sell your products or services (online courses included) outside of Udemy would be from a platform you control – ie. your own website and/or email newsletter. If you give your Udemy students a clear pathway to your website (for example, in your instructor bio or by watermarking your videos), then they can follow you outside of Udemy.

  • Ian Stables

    The price changes will be an advantage. All courses will be at a price most students are willing to pay.

    The fact is that a course is rarely purchased at the full price. Alun Hill reported getting only one sale at full price. The most of his earnings are from purchases between $10-$25. He makes a lot of money on Udemy.

    As the bulk of courses are purchased at the new prices Udemy are enforcing, this will not affect earnings.

    • Thinkific Team

      Hey Ian, thanks for commenting! You are right, most course purchased on Udemy are purchased when they are on sale and rarely for full price. Most Udemy instructors know this from their own sales reports, so their earnings are unlikely to change. The announcement essentially reflected the stance they are taking in the online education space, which basically affirms that they have no intention of selling high-ticket courses. Any instructor who feels they can charge a higher price for their course (usually justified by the additional support they provide to their students via private Facebook Groups, coaching, accountability, etc.) will have to publish their course outside of Udemy.

  • Stephanie

    I very strongly doubt that this new pricing policy will
    last. And if I knew where to write, I would tell them so. So, if
    you know how to get this message to them, please feel free to forward
    it.

    The reason I don’t think it will last is because it takes all the
    fun out of Udemy for both the instructor and the students. I was
    considering becoming a Udemy instructor myself, but with these new
    pricing policies, the motivation is gone. If I spend my time and
    effort putting together a 4 or more hour course and will have to
    invest even more time answering students’ questions, updating and
    polishing said course and promoting it, then I would like to think
    that I can put my own pricing on it and take my chances. I thought
    Udemy was supposed to be a place for people to share their
    knowledge and talents in an atmosphere of fun and fairness.

    I would think it’s quite a downer for the current instructors. No doubt
    they had quite a few people doing nice big purchases from them on the
    spur of the moment. Full price purchases. That must have been a fun
    thrill. And also waiting to see how a new, exciting offer fared in the
    community. Now that’s all gone. And I feel for the instructors on this
    count. For the buyers too, of course. It was fun going through the
    special offers on occasion and grabbing something that looked
    interesting to learn or learn more about.

    The way Udemy promoted this new pricing policy seems strained and
    disingenuous. They think they will make more money this way, but I’m
    pretty sure they’re wrong about that. Reality is bound to set in pretty
    quickly when they see the activity decrease on their site.

    I have only been a member since Dec of 2013. Actually, it’s all under my
    husband’s name because I bought the first course for him for Xmas of
    that year and never bothered to register under my own name. But, I’ve
    bought about 140 courses from Udemy since that time. Some full price, most on sale. Most of them I haven’t even gotten around to watching yet. But now, with this new
    policy, I won’t be distracted into buying new ones anymore. Because,
    until things get back to being fun and interesting, I am not buying any
    new courses for myself or anyone else.

    And, nobody ever asked me, the customer, for my opinion on these new
    policies. There’s a lot of talk about polling students and instructors,
    but I never saw anything like that addressed to me. You’d think they
    might ask someone who has bought that many courses over a relatively
    short stretch of time…

    And it sounds to me like they didn’t ask the instructors either. They just sent around some announcements that made it sound like they did.

    Most of the instructors seem to be putting on a brave face, but their
    pitches in support of the new policy sound hollow and heavily rehearsed.
    In essence, they all sound like they have been coached to say the same
    sound bytes. I have to wonder why that is?

    Anyway, I wish them all the best of luck and want you to know that I
    don’t think this is fair to the instructors, the students, nor beneficial to anyone at Udemy. The fun is gone.

    S

    • Thinkific Team

      Hi Stephanie,

      Thank you for leaving such a detailed comment. You are definitely not alone. There are many Udemy instructors who have expressed similar frustrations as your own. It is a bit vague how many Udemy instructors and customers they surveyed and spoke to before they made the big announcement, but as is true of any big decision a company makes, it is generally impossible to keep everyone affected happy. There are pros and cons to their decision. But you even said yourself that out of 140 courses you have purchased, you only paid full price for a few of them. That is probably true of most Udemy customers, and it is likely that some customers who paid full price for a course only to see it go on sale shortly after were confused and maybe even frustrated when that happened. Going forward, everyone who buys and sells on Udemy will be well aware of the price tiers and any instructor who intends to sell at a higher price point will be forced to sell their course elsewhere.

      • Stephanie

        I didn’t say I paid full price for “only a few of them” I said I paid “Some full price, most on sale”. A few implies just a smattering, whereas, I think I bought about 30% or so of them at full price.

        In any event, it seems to me the so-called “problem” was self-perpetuated and all Udemy would have to do to reverse the situation is to wean people off the Udemy-generated coupon specials. The discounts, be it the number or size of them should still be left to the instructor’s discretion.

        As things stand, the only thing that will happen this way is that there will be less really good quality courses to be had at Udemy. Nobody is going to invest hours and hours of their time putting together and overseeing long, interesting, comprehensive courses, only to have them degraded by a $50.00 price tag. Even if the instructor chooses to then offer his course at a “special” rate of $5.00, $10.00, or $15.00, the impact of seeing the full “MSRP value” of the course crossed has a very important psychological impact on the purchaser. It also carries a deep psychological meaning to the instructor who poured his heart, soul and energy into the course.

        And, by the look of it, some of the good instructors are bailing out of Udemy already. And I don’t blame them. I would too.

        Further, I don’t think Udemy has considered the long-term impact this could have on them overall. Good, dedicated instructors who are passionate about their work – the ones who put together 4-5-10-12 hour courses – will be looking for friendlier waters to sail on. If I were that way oriented, I would start a rival site that is friendly to such instructors and pick up where Udemy left off. I’m sure there are people or groups out there already thinking along those lines. Udemy has left themselves open to some major competition with this move. And I’m still not sure why they did it. It doesn’t make sense.

  • Wow – I don’t think I could have expressed my opinion about this any better than Stephanie already has. It seems kind of funny to talk about course creation and consumption as ‘fun’ or ‘not fun,’ but I think this is a great point. I too have some random courses I’ve picked up on Udemy during those occasional flash sales, some of which I have completed, (and some I haven’t even started.). Although I have also not watched all of them, it is fun to see them on my course list, and know that I have access whenever I want. While I, of course, never would have considered some of these topics at $199.00, it was compelling to pick them up for $9, even if it was common knowledge that they only ever rally sold at these ‘deep discounts.’

    I know that I will be far less likely to spontaneously purchase a course at $25.00, that is regularly priced at $25.00. After all, there’s no urgency to make a decision – I can always come back and grab it at that same price in the future. (And, I probably wont.)

    For the instructors who commonly sold only during deep discounts, these flash sales provided a reason form them to contact their student base with a compelling offer to buy. Now what, “Hey guys – just wanted to let you know that my course on X, which normally sells for $30.00, is available today for only $30.00! Get it now before the price continues to remain at, um … $30.00?”

    As far as the instructors who do have the big-time, in-depth courses, why even stick around? It’s like was mentioned in the article – maybe upload a free teaser course, and do everything within the terms of service to re-direct those students off the site. I don’t see how the loss of the truly valuable (and higher-priced courses) is a good thing for Udemy or its students.

    If those big courses are simply broken up into bite-sized mini-courses, this will simply serve to unnecessarily increase the number of available courses, making it more difficult for students to sift through the options, and for new instructors to break through.

    In terms of opportunities created by this change – it seems to me, the greatest opportunity will be for the next course delivery platform to step up and re-create the extremely successful arrangement that Udemy is walking away from.

  • I know I’m late to this conversation, but I wonder if you considered the fact that instructors may leave Udemy for Skillshare?
    Yes, it may be possible to sell your top-quality, interactive course yourself at your own website using Thinkific, but you’d still have to do significant marketing to achieve high-dollar sales.
    An alternative may be to slice the course into smaller mini-courses and offer them on Skillshare, without the need to do any selling.
    If Udemy loses instructors who decide to sell at their own websites, and others to Skillshare, they may be concerned.

    • Thinkific Team

      Hey Neil, thanks for commenting! Skillshare is definitely a great place to publish some mini-courses. And yes, you’re right – it does take some marketing efforts to sell a high priced/premium online course that is hosted outside of a marketplace. There are definitely a lot of different ways you can market your course. Lately, several Thinkific instructors have been doing very well with webinars. We have a very detailed article on how to use webinars to sell your online course. Feel free to check it out! http://blog.thinkific.com/the-complete-guide-to-selling-on-webinars/

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