3 Reasons Why Online Courses Are Profitable

3 Reasons Why Online Courses Are Profitable

If you think whether it’s profitable to create an online course or not, this post will cover three different aspects of why courses are considered the holy grail of profits.

Online courses are incredibly profitable as they are passive in nature. You create the content once and sell it as long as it’s valid. Online courses are consumed in a digital format, so there’s no overhead in manufacturing, delivering, or having a stock of some sort for your course. Online courses are high on profit after you’ve created and launched one as there’s zero to little maintenance needed for it after.

It’s no surprise that people like to create online courses as it’s pretty much create-it-once-and-sell-it-forever-model of business.

Online courses do have their downside too as the information you are teaching could become obsolete, or it can get outdated. 

If you teach a topic that is valid year after year, then the course is as passive as it can be. However, this shouldn’t mean that you stop updating the content.

It’s only beneficial to your online course students for you to update the material as often as needed. To make sure the subject and the topic is taught in a way that generates value for the student.

Because the online course is taught through digital means, it means that you have close to zero costs providing that online course to your students.

In this post, I will go through what type of initial investments are required from you and how they add up to the profitability of selling an online course.

I will also shortly go through the costs of hosting your online course and if a free hosting could be sufficient for you in the start-up phase.

What kind of continuing costs would you have for owning an online course, and if those eat your profitability or not?

Now let’s dive in and see what kind of investments are required from you before you even create your online course.

Initial investments for creating an online course are non-existent

Before you even start creating your online course, you have to realize that you need to have a website of some sort. 

You can’t sell your online course if you don’t have a website to sell it on. So at the very minimum, you would need to get yourself a domain name. 

A domain name, in short, is theCours.com, for example. That is the domain name, and in that domain, you will have your website.

Luckily getting a domain name for your business is relatively cheap. It’s something like $20/year. So that is a very small expense in your business.

If we want to make the online course creation as cheaply as possible, then you could think platforms like Udemy and Skillshare, where you just upload your course and start selling. 

However, I like to build a business, and hopefully, you too. So get yourself a domain name and build a true business and a brand.

Equipment and tech

For you to record lessons, you can always use your mobile phone if you want to create courses as cheaply as possible. However, if you’re going to create something a bit more professional-looking stuff. You need some sort of microphone to record your videos on your computer.

I recorded my lessons with the BOYA by M1 microphone, Logitech C922 web camera, and used a free program called OBS. I create my lessons with MS PowerPoint and then record the screen with OBS.

So with this setup, the profits are kept pretty high as these didn’t cost too much and you only need to buy them once. 

So as a quick summary, this setup cost me around $140.

What should be remembered here is that you don’t need to buy an expensive SLR camera to create quality courses. Surely you can invest in those types of products, but if you are just starting, it’s better to keep things simple and cost-effective.

Course hosting is basically free

Now, as I mentioned before, you can sign up to use a service like Udemy, but if you want to create a brand and a business that looks like yours. Then Udemy or other MOOC type platforms are not for you.

When it comes to online courses, we have plenty of free options out there, but possibly the best ones are Thinkific.com (which I use currently) and Teachable.com. 

These two companies offer you a platform to host your course on. What this means is that you can upload your course material to the platform, connect payment gateways (like Stripe and PayPal), and start selling your online course through them.

Instead of getting a video hosting service, expensive virus protection, or other much-needed things to your website, you can use an already established platform and sell your online course safely with little to no hassle.

I once hosted an online course on my website but very soon noticed how clunky it was with all the WordPress plugins and all. It just wasn’t worth the effort. I used Memberpress plugin if you are interested in taking that path.

While you can probably save some money by hosting your course on your website, I would say that it brings a lot of hassle by doing so.

For keeping the costs at minimum when starting, I would recommend that you use a platform that has all the features you need already built for you.

Costs of hosting your course can be zero or $99/month. Having a free plan usually have some limits though. But when you are starting, it’s best to keep costs down, and then start paying a full monthly fee when the sales begin to grow.

Thinkific example, some free plan restrictions

Probably the only cost you have here is the Stripe transaction fee, which is pretty low and will only be effective when a payment comes in.

Stripe fees

Continuing costs are as low as possible

What’s the most exciting thing about online courses, is the fact that there are almost zero costs associated with the service and product.

As mentioned before, you can pretty much host your online course for free. And if you have a domain but not a host for it (Siteground, for example), some platforms like Kajabi offer you to host the site on their platform.

So you don’t need to buy a web host if you feel like owning a WordPress site is too intimidating. 

I recommend having a WordPress site and additional services like ConvertKit to handle the email marketing for your course. 

However, these are not an absolute must if you want to keep things super simple. 

I would say the highest continuing costs that are present in my business are the ConvertKit email service provider and web hosting. 

But all in all, the costs currently in my online course business is around $100/month. And this covers everything, so you can only see that selling one $100 online course a month already covers ALL business expenses.

Line Art Mastery Online Course Pricing Example

The second course sale in a month is already pure profit.

What should be understood is that the more services you gather around your business, the more expenses you have. I, at one point, had gathered a lot of services, WordPress plugins, video hosting services, etc., and saw how the complexity in my business went up as well as the cost of maintaining my business.

The less continuing expenses you have, the more profit you will make. 

How do you make an online course profitable?

The way you make an online course profitable is to lower or eliminate expenses close to zero. And it’s pretty easy to do with online courses as you can even host your website in service like Kajabi. 

While Kajabi itself isn’t free, but if you consider the fact that you pay something like $149/month and that’s everything you pay. I would say that creating a profitable course is pretty “easy”.

Kajabi pricing table

You only have to price your course above $149, preferably $197, and you will create a profit every month as long as you sell one course every month. This pure math and nothing else.

Kajabi is a superb platform to host your course on, and I consider Thinkific, Teachable, and Kajabi to be the industry leaders when it comes to online course hosting.

When you have fewer expenses than you have income, then everything above should be profit.

How much can you make selling an online course?

There really isn’t an upper limit to how many online courses can you sell. With enough traffic to your course, the sky isn’t the limit.

For example, Joseph Michael teaches how to use Scrivener and earns roughly $100,000/year. Learn Scrivener Fast is purely an online course, and Joseph sells it in three different packages ranging from $127 to $297.

There is no ceiling when it comes to selling your online course. What’s crucial is that you find your audience and have a marketing plan that works.

When you know how to sell, whom to sell, and why your course is something that is of importance, then you have a chance to make a sale.

A final note

Online courses are highly profitable. You only need to know how to market and sell them. This is by no means an easy feat. 

Profitability comes from having a higher income than you have expenses.

Selling a course for $197 every month and having business expenses in the range of $149/month. You create a profit every month by selling even one online course.

When you are building a business, there might be other costs involved than just having a domain name or that sort. You more than likely have to do accounting too.

All different aspects of a business, either create an expense or an income. Having an online course creates income, and everything else is pretty much an expense.

The more courses, products, services you sell, the more ways you have to earn a profit.

But profit itself isn’t the only thing to look for. What you can also think about is cashflow and returning the profit back into the business to grow the business further.

So profit is not the thing to keep your eyes on. Keep your eyes on growing your online course business if you are interested in one.

Juha Ekman

Hi there, I’m Juha Ekman. A few years ago, I started my online business selling online courses and digital products. Ever since then, I’ve been obsessed with learning, especially learning marketing, sales, and everything about passive income. It’s been quite a ride, and there has been a lot of ups and downs along the way. This is the site where I share everything I’ve learned.