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There are 2 main types of online course platforms: self-hosted and course marketplaces. Before you pick a course platform, know the pros and cons of each.

One of the most frequently asked questions among online course creators is where to host their courses.

You’ve finally finished creating your masterpiece and it’s time to give it a price and start selling it… but where? Which online course platform should you use?

When it comes to selling online courses, you essentially have two options: self-host your course or sell it in an online course marketplace.

Since there are pros and cons to both options, the one that is best for you depends on your specific goals and circumstances as a course creator.this article will help you make the right choice for your online course business.

Self-Hosted vs. Marketplaces (Online Course Platform Pros & Cons) @grumomigs #teachonline Click To Tweet

What if we told you it’s a good idea to sell through both? Here’s how to Online Course Marketplaces and Self Hosted Online Courses compare, and some options to consider.

The online course platform vs marketplace landscape

Before we compare options, here’s the landscape for Online Learning Platforms according to small business owners. These options are 3rd party verified and include both marketplaces and self-hosted solutions.

G2 Grid® for Online Learning Platforms

Options for Online Course Marketplaces vs Self Hosted LMS (Pros & Cons)

Marketplaces should be viewed as a marketing channel to complement your storefront because they are a great way to generate leads that you can drive to your own online store for larger purchases and subscriptions. The challenge with these marketplaces is the ammount of control you have over the learning experience, and pricing.

When it comes to building a profitable long term business, you’ll want to use a self-hosted solution, which gives you full control over branding, and most importantly, pricing.

Related: How to Price Your Online Course (Complete Guide to Course Pricing)

Online Course Marketplaces

PlatformBest for…CostUseful Features
Skillshare Lead GenerationOpportunity cost: you are paid a relatively small royalty for the number of minutes student watch your courses (about $200/ month for first time producers)Lead generation / promotion

Shorter class formats

Mobile app

UdemyLead GenerationRevenue share (50% of revenue goes to Udemy for being listed in their marketplace)Lead generation / promotion

Longer class formats

Mobile app

 

Udemy

There’s no fee to host a course on Udemy, and you can publish as many courses as you like. The catch is, Udemy will keep up between 50% – 75% of your revenue in exchange for driving visitors to your courses.

Skillshare

Skillshare operates under a subscription model, which means students pay a recurring fee for unlimited access to the entire catalog of premium classes. Teachers are paid out from a royalty pool based on the number of minutes their courses were watched by premium members.

As you can see, it’s best to view these marketplaces as a lead generation source that drives people back to your own online course platform for larger purchases and recurring revenue.

The Pros Of Selling on Marketplaces

1. Marketing Done For You

By far the biggest advantage of hosting your course on a marketplace is that a lot of your sales will be directly driven by the marketing efforts of that marketplace. Because their revenue depends on how many students they bring to the platform, they are usually very good at marketing, and spend hundreds of thousands of dollars in SEO optimization and paid advertising every month.

2. Huge Student Base

An established online course marketplace has already done the work of attracting hundreds of thousands, if not millions of potential buyers into a single pool. Thanks to their course recommendation engine your course has a chance to be shown to thousands of highly targeted buyers that are searching for your course topic on that marketplace.

3. Large Support Communities

Marketplaces have a vested interest in making sure their instructors are happy so they stick around. To achieve that goal they provide a lot of free help and access to large instructor online communities where everyone is encouraged to motivate and help each other succeed.

4. Established Marketplaces Have Credibility

Some marketplaces have been around for years and have developed a strong brand and credibility. These are crucial factors to build trust among potential buyers who prefer to purchase from a known brand than from a relatively unknown independent seller.

The Cons Of Selling on Marketplaces

1. No Access To Your Student Email Addresses

This is hands down the biggest drawback of hosting your course on a marketplace. The most valuable asset you have as an online course creator is your students, but on a marketplace, your students don’t belong to you, they belong to the marketplace. This makes it very hard to scale your business outside the marketplace because you are unable to develop a relationship with your students on your own terms.

2. You Give Up Control: They Decide All The Rules

Not only you don’t have access to your student’s contact information. The marketplace decides how often you can communicate to your students, what you can promote or not when you message them, how much you can charge for your courses, and how long you have wait to get paid.

At all times you are subject to the marketplace rules and destiny. If you don’t abide by their rules you can get kicked out and lose access to all your students overnight. If the marketplace goes under so does all the revenue you derive from it.

3. The Marketing They Do For You Is Not Free

It’s great to have the marketplace invest in promoting your courses but that service comes at a high cost. In essence, the marketplace acts as an affiliate and they can keep 50% or more of every sale they generate. In some cases, if a sale comes via one of their 3rd party affiliates, the instructor only gets to keep 25% of each sale. Since most of their sales are already heavily discounted, it’s not unusual for instructors to make less than $3 per sale on a course priced at $200.

4. Your Brand Gets Diluted

The only brand that a marketplace has an interest in promoting is its own, not yours. You may be allowed to watermark your videos and wear a t-shirt with your company’s logo but that’s as far as you’ll get to promote your brand. You’ll also lack the ability to customize the look of your course pages so, at all times, your students will be exposed to the marketplace logo and design choices. In a sense, when you host on a marketplace you need to remember that you are working for them and not the other way around.


Self-Hosted Online Course Platforms

An online course platform like Thinkific gives you the benefit of selling on your terms. If you’re ready to create and sell online courses, and you want to keep all of the revenue for yourself with full control over branding and the student experience, a self-hosted learning management system like Thinkific should be the first place you look.

PlatformBest for…CostUseful Features
ThinkificOnline courses

Membership sites

Online Communities

Free plan includes all core features.

After that, monthly prices start at $39 per month. No transaction fees.

  • Easy setup
  • Huge selection of formats for teaching materials
  • Detailed analytics
  • Ability to launch members-only sites
  • Optional Thinkific branding

 

Thinkific is designed for independent instructors who want to teach what they know, rather than spend time learning a new software platform.

Since Thinkific provides the tools to create your digital storefront, you have complete control over how much you charge, and the design of your site.

It’s a great way to take one step beyond ebooks, coaching, or in person training – to name a few natural transitions.

You can take a full tour of Thinkific’s core features by signing up for free. Since the trial has no expiry, you can create and sell up to 3 courses with unlimited students on Thinkific for free.

Create and sell online courses | Thinkific online course platform

The Pros of Self-hosting Your Online Courses

1. You Own Your Student’s Email Addresses

Almost point for point, what’s true for marketplaces is the opposite for self-hosting. When you self-host your online courses you have full control and ownership over your student’s email addresses. This allows you to develop a closer relationship with your student base which is crucial to build trust and get repeat sales.

2. You Have Full Control: Branding, Customization, Integrations

On a self-hosted platform you are the boss. As such, you have the freedom to customize the look of your online school, slap your logo, promote your brand, integrate with other services, get detailed engagement and conversion analytics, manage your own affiliates, and depending on the platform a myriad of other features.

3. You Can Charge What You Want And Get Paid Immediately

When you self-host you can charge as much as you want for your online courses. You can also offer payment plans and even recurring paid subscriptions. Except for a small transaction fee you get to keep all the revenue generated and depending on your hosting plan may not even have to get paid ever again.

4. Joint Venture Partners Will Take You More Seriously

One of the most effective ways to selling premium courses is via joint venture partners. These are individuals on the look for high quality courses to promote to their audiences. Most JV partners won’t agree to promote a course hosted on a marketplace simply because their cut would be too small to make a promotion worthwhile.

The Cons of Self-hosting Your Online Courses

1. Marketing: It’s All Up To You To Find Students

Self-hosting is literally the equivalent of running your own business. This means it’s up to you to figure out how to build marketing and sales funnels that attract and convert prospects into customers. Arguably, marketing is by far the most difficult and time-consuming part of selling online courses but, with perseverance and the right strategy, you should have no problem thriving on your own.

2. Maintenance Costs: It Can Get Expensive

Hosting on marketplaces is “free” because they get paid every time they sell one of your courses. All self-hosting platforms charge recurring hosting fees. When you are starting these fees are small but as soon as you start growing they get more expensive. You’ll also need to account for email marketing automation tools which can get very expensive once you start getting into the thousands of students.

3. More Work: Be Ready To Put In Some Serious Time

Having more control also means you are in charge of maintaining all the moving parts of your online school. Again, to get started is very easy but once you have thousands of students and several online courses, keeping everything under control gets more and more difficult.

4. Lack Of Credibility: Testimonials and Reviews Can Easily Be Faked

Unless you are a celebrity, influencer, or represent a well-known brand most people won’t who you are and if they should trust you or not. On marketplaces, there is a bit of filtering and because their review and rating system is very hard to hack, bad instructors are easy to spot. When you self-host, student reviews and testimonials have less credibility because they are a lot easier to fake and manufacture.

Which online course platform is the best option?

So… which type of platform is the best?

It depends. There is no shortage of success stories of instructors using either approach. In fact, many top online instructors use a hybrid approach – typically starting on a marketplace and as they become more successful transitioning to a self-hosted platform where they have more control and can charge as much as they want.

Jonathan Levi, for example, an online course creator that teaches speed reading and memory skills, built a highly successful online course business utilizing Udemy (a course marketplace) and Thinkific (self-hosted course platform) simultaneously. You can read the story of how he built his business here.

If you are starting out, hosting your course on a marketplace is probably the easiest way to get your first sales and validate the demand for your course topic. However, if you plan to build a sustainable source of income, you need more control, branding is important for you, and you plan to sell premium online courses, self-hosting is definitely the way to go.

compete-guide-create-and-sell-online-courses

Self-Hosted vs. Marketplaces (Online Course Platform Pros & Cons) @grumomigs #teachonline Click To Tweet

Create and sell online courses | Thinkific online course platform

The author of this post, Miguel Hernandez is a seasoned online instructor and the founder and CEO of Grumo Media.

Originally posted August 2017 and updated in August 2021 to include more information on Online Course Marketplaces and Self-Hosted Online Course Platforms