By Paul Jarvis, cofounder of WPComplete
Online courses are solely responsible for me going from a freelancer, only getting paid when I did client projects, to a product creator, getting paid even when I’m sleeping (or eating a vegan burrito). And, while they aren’t money trees that requires zero work, they generate much more revenue than is possible doing 1-to-1 work with clients.
When I looked at my Stripe account after the first month of selling my first course and saw $27,559 USD in gross revenue, I knew in that instant I was hooked on creating and selling online courses—they were generating real money and I was really enjoying teaching through an online platform.
In this guide, we’ll be covering:
- Why create an online course?
- How do you pick an online course topic?
- How do you validate your online courses?
- What do you use to create an online course?
- How do you setup your online course?
- Webinars, mailing lists, statistics and why they’re important to online courses
- Paypal, Stripe, transaction fees, and other expenses for online courses
- How should you price online courses?
Why create an online course?
Online courses allow you to create engaging content for students anywhere in the world. Not only can it be fun and rewarding to share what you know, it can be quite profitable!
According to Statistics MRC, global eLearning market revenue was $165 billion i in 2015 and is projected to reach $275 billion by 2022. Of course online courses are never a sure thing, but if they’re done correctly, they can give you a great bit of additional income… or even become your sole source of income.
I started out with zero online courses about six years ago. Fast forward to today and I’ve taught over 14,000 students and generated millions of dollars in income from my Mailchimp training course and Freelancer course. This guide isn’t theory. It’s based on my own experience growing an online course business, and then helping others do the same with WordPress plugins I co-created, WPComplete and WPHelpful.
I remember when I created my very first course, I was VERY VERY VERY nervous about launching it. But, because I had created the online course using the same method I’ll outline below, I watched sales roll in on the first day. And then even more on the second day. And then even more sales the next month. And then even more the next year. Thankfully, online courses don’t have to be a one time deal. You can iterate on them and keep tweaking them to see even further success.
How are online courses a source of income?
Let’s be honest, making money is the main reason to create and sell an online course. Yes, it’s pretty awesome to give value to students by teaching them something useful. Yes, it’s one of the best feelings in the world to hear from past students who are doing well because they learned from you. But really, if we’re running a business, profit is critical. And the beauty of creating and selling online courses is that they typically don’t cost a whole lot to create (other than your time), and the potential for gross revenue can be high.
Lots of folks are teaching and considering teaching online courses:
- Bloggers. Since your blog is free for anyone to reach, you can take a look at your most popular posts and potentially create a course from them.
- YouTubers. Ad revenue is never much, unless you’re MKBHD. Courses can generate a whole lot more revenue than ads, and are far less annoying.
- Podcasters. Podcasts are free, and just like YouTubers, ad revenue is minimal. Take a look at your episode statistics. Which stand out and could they be made into a course on that topic?
- Authors. Most books cost around $20. If you have a traditional publishing deal (like I do), you get a small percentage of each sale. So let’s say you sell 20,000 copies of a book. That’s $400k gross, and probably a bit less than $50,000 for the author. Now imagine you had a course for $300. To gross $400k you only have to make around 1,300 course sales, and the best part is that you get to keep most of that money.
- Speakers, coaches, consultants. If you are already making money by sharing information you’ve got, and selling your expertise in a one-off fashion, you can turn that knowledge into a course and sell it to far more people that you could travel to speak to or coach one on one.
A small aside here, but courses don’t just have to be about revenue either. Some businesses, who already have paid products, create online courses to help acquire or retain customers by using online education in free courses. By using free online courses to help existing or potential customers learn something about your product, you are showing them exactly how to get the most out of what you’re selling, and keep them happy and as active customers for longer.
Online courses can generate passive income. A word of warning about passive income in general, it tends to not be super “passive”. Or in other words, you have to do a lot of up front work in the hope that passive income happens. And then if it does, you have to monitor and iterate on it ensure it keeps happening. So articles about “passive income from online courses” don’t always spell out the whole story here. Yes, my online courses make me money while I’m sleeping or away or eating vegan burritos, but I also still need to spend a great deal of time working on them to make sure they keep generating income.
How do you pick an online course topic?
To create course content that will sell, you can literally just ask your audience (the people already paying attention to you online). Even if it’s a small number of people, we all start somewhere. Your audience can be: your mailing list subscribers, social media followers, clients, whoever listens to you online (that isn’t your mom, she will think all your course ideas are just amazing).
I’ve used Typeform surveys to collect information on course topics and ideas, but you can also simply ask people directly or even create polls on social media. Remember though, interest in a subject from people doesn’t always translate into course sales. You still have to consider:
- How would this topic be valuable to someone, in terms of them making money or being somehow better?
- How much would it cost someone to not have this knowledge?
- Does the specific audience for this topic have the means to pay for the information? For example, if they are struggling musicians, they probably can’t afford a $2,000 course.
- Are the people this course would be for already spending money on solving the problem this topic would help solve?
Courses should focus on one main thing, otherwise they’re harder to sell or explain. For example, if you can fill in this sentence, you’re off to a good start:
My course will help [specific audience] learn how to [specific outcome] through [your topic].
I pay attention to my mailing list for course ideas. What topics are people replying to the most when I send my weekly emails? What questions are they asking me? And if nothing stands out, I survey them.
Think about your own business or side hustle. What are you currently selling, even if it’s a service or 1-to-1 thing (like consulting)? Is there a way to translate that into a course? Or, if you’re selling products (say you have an online store or even brick and mortar store), what have you learned from your core business that could be taught in a course format?
How do you validate your online courses?
As I mentioned earlier, interest in a course topic sadly doesn’t always translate into course sales. That’s because until people are presented with an option to buy something, everything seems awesome or interesting or “worth it”. If you have interest in a topic, but want to test the waters, there are a few things you can do.
The first thing you can try is pre-selling a course. So, make a landing page with a purchase button and see if those who expressed interest would also be interested in pre-buying it, typically at a deep discount (since they’re paying before they’re getting it—like ordering a Rivian EV Pickup).
By pre-selling, you’re proving there’s real demand (money) for you to teach a topic. Second, pre-selling shows that a course on the topic can generate revenue, because it’s generating revenue before you’ve even created it. Finally, all the folks who do pre-order it should get early access, so they can go through the material, make suggestions, and even give you testimonials (all before you launch your course publicly).
I pre-sold Creative Class and generated about $10,000 before I started creating a single lesson. These people got early access, made suggestions so I could make the course even better, and gave me student testimonials, so I had some social proof on launch day. I honestly think the main reason it generated $27,559 in the first month was because the materials were solid (tested by early buyers), and had glowing reviews.
The main thing with pre-selling is that you either have to make the course, or give everyone a refund the second you know you aren’t going to make it. You can also “Kickstarter style” pre-sell a course, and only take everyone’s money if it reaches a certain threshold, which is basically crowdfunding. You’d do this to see if there was a market willing to pay for your course and if there is, generate some money to help you through creating it. There are even WordPress plugins for crowdfunding like this one or this one.
If pre-sales aren’t for you, then you can always try a “beta group” or “pilot course” where you sell your online course at a discounted rate because it’s a minimum viable version. Meaning, maybe you forgo creating slides and templates and bonuses, and teach the course live on video for a small group of students.
Again, the value in piloting a course idea is to do a little bit of work, see if you can sell it, then use what you learn from the pilot to create a full course.
Another way you can validate your online course topic is to create a landing page for it with a mailing list signup on it. This is pretty easy to do with WordPress and Mailchimp, or even easier to do by using a Mailchimp landing page.
That way, you can see if your topic and your pitch works well enough to get people to join the waiting list. Remember, not all will buy, but if you get a few hundred people, or better yet, a few thousand, that may be proof enough that you should develop your full online course on your topic.
What do you use to create an online course?
Once you’ve landed on a topic and proved there’s some demand, it’s time to get to the real work, creating the actual online course.
Most online courses are a sequence of videos where the teacher explains something step-by-step in a series of lessons. One lesson per idea. To learn more about outlining and creating lessons, head to this article (Step 4: Write and record your course content).
There are several ways to do these lesson videos:
- Videos of you talking, and looking into the camera
- Videos of you talking over slides you’ve created
- Videos of you talking over a recording of your screen, so the viewer watches you click and type while hearing your voice
The way you choose to film your course depends on the content. If you’re teaching an online course that covers recipes, it probably makes sense to film you in the kitchen. If you’re teaching a technical or code-related course, it probably makes sense to record your screen. For most other things that cover mindset, processes or general knowledge, you talking over slides will be best.
To create an online course, we have to use the right tools. Luckily, nowadays the right tools are easy to get and relatively cheap. And, as your course starts to make money, you can invest in better tools. Most computers have a built-in microphone and webcam, which aren’t the best quality, but can totally work for your first course.
If you’re at a point where your course is making money, here are the exact tools I use to create premium quality content for:
- Recording intros to my course videos of myself speaking on camera
- Doing interviews via Skype, Hangouts or Zoom to promote my courses
- Recording my podcast interviews, where I talk about my courses
- Doing screencasts for my courses and software products
This all might seem overwhelming or confusing as well, but remember, your gear can be a slow and iterative process. And you don’t have to know precisely how something works if it helps you achieve what you’re after.
Much of my job now involves both audio and video. My courses all require recording a combination of myself and my screen, my books require 100s of interviews, and my podcasts obviously require crisp, clear audio. Even my software products have videos for support.
I figured it could be useful to share both what gear I currently use and why I use it. Just in case you’re looking to do some recording as well.
I will also note though that when I began doing interviews and audio/video recording, I started out with the earbuds my iPhone came with and the camera that’s built into my iMac. Only once audio and video became both a source of income as well as something I had to do a few times a day did I start to invest in fancier equipment. And even then it was incremental—I didn’t start with the very best equipment, but I got there eventually, through trial and error and as my revenue grew.
All of the following gear is what I use for:
- Recording intros to my course videos of myself speaking on camera
- Doing interviews via Skype, Hangouts or Zoom
- Recording my own podcasts
- Doing screencasts for my courses and software products
This all might seem overwhelming or confusing as well, but remember, acquiring your gear can be a slow and iterative process. And you don’t have to know precisely how something works if it helps you achieve what you’re after.
Quicktime – recording and screencasting software
A lot of folks don’t realize that Quicktime is powerful software for recording raw files. You can use it to record audio or video, but you can also use it to record your screen and mouse. I use it for almost everything when it’s just me speaking into my computer or doing a screencast.
I also very occasionally use Garageband to edit audio and either iMovie or Adobe Premiere (Pro or Rush) to edit videos.
Shure SM7B – microphone
I’ve owned over a dozen microphones over the years, both as a podcaster and a studio musician. I know “the best mic for podcasting” is a highly contested topic, but the SM7B is buttery magic for my needs. It makes me sound so crisp and clear, like I’m talking directly into your ears. No Yeti or Rode has ever done that for me. The caveat here is that this mic has an XLR connection (not just a USB cable), so it requires an interface to connect to my computer, like this one (listed below).
Universal Arrow – audio interface
This is what I use to get the right level of my audio and connect my XLR mic to my computer. It uses Thunderbolt 3 (which is ridiculously fast), so there’s almost no latency and it doesn’t have many knobs to fiddle with, which is good, since other than up/down for levels, I don’t know what I’m doing.
CL-1 – mic activator
This provides about +25dB of gain to the microphone, which is great because the SM7B’s primary complaint is that it doesn’t have a whole whack of gain. What does that even mean? Well, it lets you get the best possible audio output from a microphone—as loud and as clear as possible. It’s also built like a tank: solid metal casing with nice padded feet.
Sony MDR7506 – headphones
Call me old-fashioned but these are the best studio monitors (what pro’s call headphones) ever. Other than replacing the padding twice from wear, I’ve had mine for 20 years and they still work wonderfully. These give a bit of noise isolation when doing interviews and sound exceptional.
Auray TT-ISO – mic stand
This mic stand is great because it doesn’t take up too much room and is mostly padding at the bottom which minimizes vibrations from your desk (if you type or click and record at the same time).
Sony a6500 – camera
I’ve tried almost every true “webcam” on the market and they’re all garbage in terms of quality (i.e. they all produce videos that look like they were filmed with a webcam). When I wanted to up my video game to look professional, I found that using an actual digital camera would be best. The Sony a6500 is perfect for my needs because not only does it have auto-focus, it has facial-focus which will automatically keep focus on my face during interviews!
Sony 16-50mm – lens
I like this lens because there’s a bit of zoom, so I can get the shot I want without repositioning my tripod. For photos I prefer prime lenses (no zoom), but for video, it’s just easier to fiddle with the zoom than the tripod placement. This lens also has a 3.5 F-stop, which is nice for focusing on your face and slightly blurring whatever’s behind you.
Elgato Camlink 4k – HDMI capture
This is a magical little connector that connects the a6500’s mini-HDMI port to my computer’s USB port. It allows me to stream up to 4k from my a6500 into Skype, Zoom, etc! I can even use this device so my iMac serves as my monitor while I’m filming course videos. Using this connector, the right camera and professional lighting for video calls will make people go “WHOA” when you appear on their screen for the first time.
Elgato Keylight – lighting
This is a professional LED lighting kit that bolts onto your desk and telescopes up. Sure, there are $20-$90 LED lighting “rigs” on Amazon, but I’ve tried a few of them and they’re all awful. The Keylight is expensive AF, and totally worth it. Why? I can control the temperature and brightness from my iMac’s menubar. The pole mount is amazing in its simplicity and function (I wish they sold it separately so I could use one for my a6500), and I like that there are no batteries (because batteries run out, typically mid-way through recording something).
Tools can make things better and easier, but they can also be a useless distraction in the beginning. If you want to create your first online course, use whatever you have currently (like iPhone headphones or your computer’s webcam). Tools are maybe 5% of the equation at most, the rest is you doing the work to make a great online course.
So when you’re creating content, make sure every lesson tells a story, is entertaining enough and inspires students to convert what you’re teaching into action on their part.
- How can you hook students? Just like TV shows that start with a really compelling piece of information, that leaves viewers wanting more, start your lessons in a similar fashion.
- Tell a story. People remember stories. Even if it’s math and stats, tell a story or give a great example to go along with the numbers.
- Use emotion, even if the topic is not emotional. People also remember how they feel when you tell them something, so it’s ok to let your enthusiasm for a topic show (you’re probably enthusiastic about the topic you’re teaching, right?)
- Inspire. You don’t have to brag, but how has having the knowledge your teaching helped you, your business or your life? How has it helped others?
The best part of online courses is that you can go back and tweak, re-record and update lessons whenever you want. I redo my own courses once a year for Chimp Essentials (since it’s based on Mailchimp and Mailchimp changes often) and once every two years for Creative Class, because as time goes on I get better at teaching and can be clearer and more confident.
How do you setup your online course?
Once your course has been filmed, it’s time to put it somewhere. Sure, you can use something like Udemy, but you’d be putting your online course in a place that already has over 100,000 other courses. You also only get a percentage of each course sale (less if the student found you through their search engine and less through paid channels).
But, for myself and many other course creators, we’d all rather own our platform and have absolute control over it, by using WordPress and a few tools.
On the WordPress side, my setup is simple:
- A WordPress theme, any one will do. The design is secondary to the content—both your course content and the content you write to pitch your course.
- RestrictContentPro to manage your online course in WordPress. It’s what I personally use, and I think it’s the best online course plugin for WordPress. It also has an add-on called MailChimp Pro which connects course sales to your mailing list, so you can track which subscribers have purchased your course.
- WPComplete to help students track their progress through each lesson.
- WPHelpful so students can give ratings and feedback of each lesson. This helps make your teachings stronger, since you can look for patterns in feedback and adjust your lessons as needed.
- Vimeo to host videos. Vimeo is great because it lets you add colours to the playback bar, and lets you set where your videos can be played (specific URLs), that way people can’t “accidentally” post your lesson videos anywhere on the internet.
- Fathom Analytics to provide stats and show conversions. It’s a simple stats program that shows you everything you need on a single screen.
For under $600/year ( depending on the theme you use) you can have a fully functioning course that lives on your website. And, if you’re already using WordPress for your site or blog, you can install it there, no further setup needed.
A note about online courses vs membership sites
Membership sites can be online courses, but they don’t always have to be. a Membership site could just be paid access to a community or message board or Slack channel.
Basically, a membership site works a lot like an online course though, you collect money to give access to paying memberships (just like a course). But, membership sites don’t always have to have a teaching or learning component to them. They can simply be access to a group or community. They typically charge for monthly or yearly access too.
Online courses can be membership sites too (confusing, I know). If your online course charges a monthly fee to keep access or to keep gaining access to new material or commmunity features, then it’s also a membership site.
For an online course to be an online course, it’s has to teach something. But we don’t need to get bogged down in the nomenclature here, regardless of what it is or what you’re building, make sure the people paying you are getting value from it. That’s the crux of what needs to be done.
Webinars, email lists, statistics and why they’re important to online courses
Outside of the WordPress setup, there are a few more tools that help you get the most out of your course and have the best chance of selling it.
- Mailchimp (or any mailing list software) – Every course needs a mailing list, because email marketing is the best way to have a waiting list, handle open/course registrations, send post-purchase emails to students, and even segment out course buyers from any sales funnels or automations. I choose Mailchimp because it’s easy to use, and connects well to my online courses through WordPress.
- Stripe and Paypal – If you charge money for your online course, you need to collect it, and these two tools do that for you. I suggest using both as some people will want to pay directly by credit card, through Stripe, and some people will want to use funds in their Paypal accounts. I typically see a 50/50 split in terms of payments between Stripe and Paypal.
- Crowdcast for webinars – A lot of online course sales can come through doing live webinars. This is a great way to connect live with a potential audience, maybe give them a taste of the course by teaching them something small, and/or answering questions they may have about the course. I have always done one live Q&A webinar every time I open my courses, and it always leads directly to course sales. Crowdcast is great because it has question and answer functionality, lets you export registrations (or connect it directly to Mailchimp) and “just works”.
- Fathom Analytics – For my courses I need to see which pages are the most popular, which referrers send me the most traffic, and how many people click the BUY button. That’s it. Luckily Fathom is a great Google Analytics alternative, which lets me do just that.
This may seem like a lot of tools, but for the most part, once everything is setup, you don’t need to worry about them ever again (except webinars, if you’re teaching one, you’ve got to show up for that!)
Paypal, Stripe, transaction fees, and other expenses for online courses
It’s not free to create online courses, but since online courses generate revenue, it’s totally fine to have a few expenses (which you can write off at year end).
Online courses are great because there’s potential to have very high margins. This is mostly because it’s relatively inexpensive to setup and run an online course, and quite a few expenses are fixed—meaning, even if you make a lot more, your expenses won’t increase at the same rate.
If we’re looking at one of my courses, here’s what my yearly fixed expenses are:
- Hosting, $120. I use DigitalOcean paired with ServerPilot, but any host that makes a WordPress site speedy will work. If you don’t want to or know how to setup a server, use FlyWheel.
- RestrictContentPro, $100
- WPComplete, $100
- WPHelpful, $50
- Vimeo, $108
- Fathom Analytics, $120
That’s $600 a year in fixed costs. If you sell your course for $300, then 2 sales per year cover them. Next let’s look at variable expenses, as these do increase as you sell more courses, but not by much:
- MailChimp, Standard plan, which starts at $15/month. If you have a list of about 2,500 contacts, it’s $50/month, and goes up as more people subscribe. But, if you’re converting subscribers to students well, more subscribers also means more revenue.
- Stripe and Paypal, 2.9% + 30 cents per sale. There’s no way around this, but it’s fortunately a small amount for processing a payment online. So if you course costs $300, then your transaction fees will be $9. Not bad.
If you consider how much it costs to run a traditional business, the expenses for courses are minimal. No employees or payroll, no office or storefront rent. You don’t even need to buy a 1-800 number (just use email).
There are also optional expenses, but you certainly don’t need them to start:
- Hiring a designer or developer to make a custom WordPress theme for your course. $1000s.
- Buying a unique domain name for your online course. $20.
- Tons of recording gear. $1000s
None of those three items are required when you’re starting out. Start out with what you’ve got, sell and generate revenue, then re-invest that revenue in better tools, better design, etc. Remember, the best part of online courses is that you can update and tweak them as time goes on.
How should you price online courses?
What are you going to charge for your online course? What will people pay for your online course?
If you price too high, people won’t buy. If you price too low, you may be leaving money on the table.
Your price has a very direct impact on everything from sales to marketing, to the types of students who’ll buy it, to how much extra and personal effort you can provide to each student.
There are two main models for pricing: one time or recurring. One time means someone buys your course and gets access to it, never paying you again. This is how most “normal” online courses work. Recurring is like a subscription, so students pay for access for an amount of time, typically monthly. And if they stop paying, they stop getting access. Recurring is tricky, because the idea is if people are paying monthly, they should be getting new content monthly as well. If you’re not going to churn out new content all the time, stick with one time payments.
One time payments can have a few options. You can offer lump sum payments, where students pay one price, one time, and get access. Or, you can offer payment plans, where students pay a set amount for a set number of months, knowing that they only get to keep access to the materials if they can make all the payments.
Personally, I’ve always done lump sum single payments. It’s the easiest to manage as a business, and then I don’t have to chase people every month for payments if they miss them.
You may be tempted to sell your first online course at a super low price. But doing this can degrade the perceived value of a course. It also makes your margins low, and if you prefer to help out students individually, it won’t be worth your time.
There’s always going to someone (or a Udemy course) priced lower than you course. These types of customers are only loyal to “deals” and never to you, as a course creator.
You also need to price by value, not by length. A longer course isn’t a more expensive course.
For pricing, it can help to start with the following: you know who your course is for because you created it for someone in specific. Well, can they afford the price you’re thinking of? How valuable will the course be to them, and how much could they make by taking it (be realistic here)? What other courses are in the same market, and how are they priced? How large is your audience? Often times you can charge less with a huge audience because of volume.
You can always increase your online course price later, as you add value to it. In fact, the best time to run a sale is when you announce your course is increasing in price, but if people buy it now, they’ll lock in the lower price, and get access to everything.
How do you sell online courses?
When you’re creating a course sales page, think about who specifically the course is for. Talk directly to them, as no one else matters.
Then, think about the course in terms of outcomes or solutions. Don’t pitch the minutiae. Explain the benefits of learning what the course is teaching. What will it help people do? How will they be better off for having this knowledge?
A course sales page is typically the homepage of the course. It doesn’t need a fancy design. Simply adding a video message from yourself, the teacher, and maybe some photos of students with their testimonials will suffice. Breaking a course sales page down, you’ll need:
- A persuasive headline. Remember using a hook to get attention in your lessons? Do the same here. What’s a headline that would make someone want to keep reading?
- Present the problem. What would a person be experiencing if they were a good fit to take your course? What problems would they have? What could they not do? Show the reader you understand their current pains and frustrations, even mention if you’ve experienced similar issues in the past.
- Provide a solution. That’s your course! Present your course in a way that feels like the next natural step to the problem presented. What does it do? How does it help? What realistic outcomes can people expect from taking it?
- Lay out the course. What are the lessons? What’s the format? Are there bonuses? Is there a community? Give a brief outline of what they’ll get when they buy.
- Social proof. Share testimonials from previous students (or people beta tested your course), not just saying that the course is great, but being specific about what they achieved after taking the course.
- A clear call to action. You have to ask for the sale, and mention the price.
- Credentials. You don’t need degrees, but you do need to mention why you specifically are the right person to teach this course. Why should they trust you? Brag a little and be honest about your experience on the subject.
Once you’ve got a landing page, you’ve got to start sharing it. With your mailing list, on your social media profiles, etc. In order to get course sales, people have to be able to find your course. SEO can help here, and maybe that means writing several articles on the topic of your course, doing podcast interviews, or writing guest posts about the topic—all linking back to your course.
The end, the beginning
I helped create WPComplete and WPHelpful, because I truly believe that online courses are a great way to generate revenue online. I want to enable as many people as possible to get out there and teach something to others.
Hopefully this post has helped you learn how to create and sell your online course. Remember, reading about online courses is the first step, the next, more important step is to actually create and launch your online course.