When considering online course creation and management platforms, I often see Teachable recommended. I wondered why it gets recommended so much and if it was the best choice for most people since I haven’t used it yet myself. So I decided to dig deeper and find out what experienced users are saying.
Is Teachable a good platform? Teachable gets recommended often for its ease of use, ability for customers to focus on course creation and marketing rather than course delivery technology, effective marketing options, and convenient management and payment of affiliates. However, these features come at a higher cost compared to other options for use on your own site like LearnDash.
There are many factors to consider when choosing a course creation, delivery, sales option but in this article I want to focus on the cost. Teachable charges a monthly fee and, depending on the plan, a transaction fee and payment processor fees. Often potential buyers focus on the monthly fee do not adequately calculate the added costs over time of services like this.
Helpful Resource – 10 Places to Sell Your Course Online
The True Cost of Teachable
At the time of this writing (July 23, 2019), Teachable’s stated pricing is the following for an annual plan (you can pay month to month but it will be more expensive). We will only focus on two of the three plans as the Business plan is probably more expensive and beyond the needs of what most of you are looking for:
- Basic Plan – $29/month and 5% transaction fees.
- Professional Plan – $79/month and no transaction fees.
However, one thing shoppers sometimes fail to take into account are payment processing fees which are shown on a more detailed pricing page. Payment processing fees are 2.9% + .30 per transaction. International fees are higher.
Let’s run some numbers and see how much these plans might cost you each year. For simplicity, we will use standard U.S. sales processing fees as a baseline.
Annual Cost Scenarios
Scenario 1 – Basic Plan + $50 Course + 200 sales (Over 1 year of time)
Let’s say you are just starting out and you plan on selling your course for $50. You want to be conservative and estimate that you will make 200 sales of your course in this first year.
How much will it cost you to use Teachable in this scenario?
- Monthly Fees – $29 x 12 months = $348
- 5% Transaction Fees – $10,000 in course sales revenue (200 courses x $50 each) x .05 = $500
- 2.9% Payment Processing Fee – $10,000 in course sales revenue x .029 = $290
- .30 per Transaction Payment Processing Fee – 200 transactions x .30 = $60
- Total Fees – $1,198
- You Keep – $8,802
To use Teachable’s system to sell your 200 courses, it cost you $1,198 in fees. $1,198 is 11.98% of your $10,000 in revenue.
Scenario 2 – Professional Plan + $50 Course + 200 sales (Over 1 year of time)
Let’s run the same scenario using the Professional Plan to get rid of the Teachable based transaction fees in exchange for a higher monthly cost.
- Monthly Fees – $79 x 12 months = $948
- No Teachable based transaction fees
- 2.9% Payment Processing Fee – $10,000 in course sales revenue x .029 = $290
- .30 per Transaction Payment Processing Fee – 200 transactions x .30 = $60
- Total Fees – $1,298
- You Keep – $8,702
For the amount of revenue you are doing this first year, it makes sense to stay on the Basic plan.
In this first year low sales scenario, your cost of using Teachable on the Basic plan is essentially $1,198. You are paying Teachable this amount to handle all your technology, payment processing, and the other features the program provides for you.
Comparison to LearnDash
Now let’s compare the same scenario using LearnDash; a plugin for a WordPress site that charges an annual fee. The comparison is not totally fair since the programs don’t offer exactly the same features but you will have to value the difference in features and convenience based on your own situation.
- LearnDash Basic Package (1 Website License) – $199
- LearnDash Plus Package (10 Website Licenses) – $229
Payment Processing Fees
Most people are probably going to be looking at either PayPal or Stripe to handle order processing. Here are their fees at the time of this writing and they are the same that Teachable charges:
- Stripe – 2.9% + .30 per charge
- PayPal – 2.9% + .30 per charge
Let’s run the same scenarios above and this time we will only use the LearnDash Basic Package. Since the payment processing fees are the same for both Stripe and PayPal, we don’t need to run separate numbers for them.
Scenario 1 – Basic Plan + $50 course + 200 sales (Over 1 year of time)
- Learn Dash Annual Fee – $199
- 2.9% Transaction Fee – $10,000 in course sales revenue (200 courses x $50 each) x .029 = $290
- .30 per Transaction Fee – 200 transactions x .30 = $60
- Total Fees – $549
To use LearnDash’s system and a payment processor to sell your 200 courses, it cost you $549 in fees. This is 5.49% of your total revenue.
Summary – Using LearnDash saves you $649 in this year 1 scenario vs. Teachable ($1,198 for Teachable Basic + Fees – $549 LearnDash + Fees). In reality, you would be saving about $54.08/month using LearnDash. As a percentage of total revenue, LearnDash cost 5.49% compared with Teachable’s 11.98%.
11.98% is on the high side but let’s consider another scenario. This time, let’s use a 5 year time period and more sales to see what happens to total fees and if this percentage changes.
5 Year Cost Scenario
Let’s say you did 200 sales in your first year like the above scenario. In year 2, let’s speculate you did better and saw a 30% increase in sales to 260. In year 3, word got out and your course really took off and your sales doubled to 520. In year 4, word continues to spread and you double again to 1040. In year 5, things are still going well but the growth rate slows a bit and you increase by 50% to 1,560 sales.
- Year 1 – 200 sales
- Year 2 – 260 sales
- Year 3 – 520 sales
- Year 4 – 1,040 sales
- Year 5 – 1,560 sales
- Total sales over 5 year period – 3,580 sales
For ease of calculation, I am not going to factor in any sales discounts. I am also going to assume you are bumping up to the Profession Plan at Teachable because it makes the most financial sense given your sales growth.
Scenario 1 – Teachable Profession Plan Cost Over 5 Years
- Monthly Fees – $79 x 60 months (5 years) = $4,740
- No Teachable based transaction fees
- 2.9% Payment Processing Fee – $179,000 in course sales revenue (3,580 courses x $50) x .029 = $5,191
- .30 per Transaction Payment Processing Fee – 3,580 transactions x .30 = $1,074
- Total Fees – $11,005
- Total Revenue – $179,000
- You Keep – $167,995
In this scenario using Teachable’s Professional Plan, costs for the monthly fees remain the same every year but the processing fees scaled up with the sales volume. However, the $11,005 you pay Teachable has now decreased to a rate of 6.15% of the total revenue you bring in. This is because the more you sell, the monthly fee for Teachable decreases as a percentage of your total revenue.
Scenario 2 – LearnDash + Payment Processor Cost Over 5 Years
Sometimes you can get pricing discounts with payment processors with a higher volume of sales but rather than worry about that, let’s keep the numbers the same for comparison sake as these seem to be industry standards right now.
- LearnDash Annual Fee – $995 ($199 per year x 5 years)
- 2.9% Transaction Fee – $179,000 in course sales revenue (3,580 courses x $50 each) x .029 = $5,190
- .30 per Transaction Fee – 200 transactions x .30 = $1074
- Total Fees – $7,259
- Total Revenue – $179,000
- You Keep – $171,741
In this scenario using LearnDash’s basic plan plus payment processor fees, costs increased in a manner similar to Teachable. Monthly fees stay the same but payment processing scales up with the amount of sales. The $7,259 you paid LearnDash and a payment processor is 4.1% of the total revenue you bring in.
Bottom Line – The higher the volume and total sales revenue you bring in, the closer the total costs are between Teachable and LearnDash. Using LearnDash saves you $3,746 in this 5 year scenario or about $62.40/month using LearnDash. As a percentage of total revenue, LearnDash cost 4.1% compared with Teachable’s 6.15%.
So Which is the More Strategic Option – Teachable or LearnDash?
What I recommend in a scenario like this is deciding which platform best accommodates your long term goals with the kinds of features, convenience, and control you are looking for. In the second scenario above, paying $3,764 more over a 5 year period really isn’t that much if the features save you time and allow you to sell your course and satisfy your students better.
If you are just starting out as a course creator, it might be most strategic to choose the course delivery platform that lets you focus on serving and selling to your audience effectively without the technology headaches while keeping costs relatively low. Ease of use, marketing flexibility, and technology that satisfies your customer needs are key factors for consideration and may outweigh minor costs differences.
Over time, if you find that another platform lets you serve your audience and market to them better, it may be worth the hassle to switch. But when you are starting out, focus on getting to know your market, finding the right price, and serving them well as you collect feedback and revise your product offering. Teachable may be a good fit to accomplish this without extra technology problems to worry about.