Should I Create an Online Course or a Membership Site?

Whether you're an actor or an animator, an entrepreneur or an electrician, a data analyst or a dating coach, people want to learn how to do what you do. 

Two popular ways of getting that knowledge out there and getting paid for it are online courses and membership sites.

With an online course, you create and sell educational content as a digital product that people buy. 

Online courses are typically broken up into distinct modules or lessons, and usually cover a specific skill, technique, or idea. 

With a membership site, you charge a monthly fee that provides members with access to exclusive educational material and content, in much the same way as a subscription-based service.

In this comprehensive guide, we'll be taking an in-depth look at both online courses and membership sites, as well as the pros and cons of each of these popular creator monetization options. We'll be looking at:

Online Course vs. Membership Site: Time and Effort

More than 2,000 years ago, Chinese philosopher Confucius said that if you find a job you love, you'll never work a day in your life again. Although there's a lot of truth to Confucius' timeless wisdom, it's important to be realistic. Regardless of what you love to do, creating content for an online course or a membership site can be a lot of work.

That said, the amount of time and effort involved in creating an online course or membership site varies. Let's take a look at ecourses first.

Online Courses: Time and Effort

In terms of time and effort, online courses can be slightly less effort than creating and running a membership site. There are two main reasons for this:

  1. Ecourses are typically created and sold as digital products. This means that, once you've invested the initial time and effort into creating your online course, you can “set it and forget it” and wait for the sales revenue to come in.
  2. Pre-launching an online course is an excellent way of gauging interest in your course before you put in the hard work of actually creating your course materials. By pre-launching your ecourse, you're testing the waters to see if your idea has commercial appeal. If it does—which would be indicated by people signing up for your email newsletter or asking for more information—you know that your effort will pay off. If it doesn't, you've only “wasted” the time and effort it took to put your pre-launch materials together, not the entire course.
  3. Another way to think about ecourses with regard to the effort involved is to think of your ecourse as an actual product (which it is!). The time you spend researching your material is like the research and development phase many products go through before being sold to consumers. The time it takes to actually produce your content is like the manufacturing time it takes to actually produce your product. However, once the finished product is finally complete, it's ready to be sold — with little further effort necessary. This is one of the main benefits of creating online courses over membership sites; once it's done, it's done.

Membership Sites: Time and Effort

Technically, it would be accurate to say that membership sites typically require an investment of less time than ecourses. However, although membership sites may not take as much initial effort to produce, they take a lot more sustained effort over time. This is because membership sites offer content to the audience gradually.

Regardless of how frequently you publish new content, it's typically released in smaller batches: a weekly blog post or digital download, a fortnightly episode of your podcast, or a monthly video series, for example. Essentially, with membership sites, you're producing less content more regularly, over a period of time.

One of the strengths of membership sites is that your efforts function like a flywheel over time. Flywheels are used in engineering, often to power heavy machinery. Flywheels require a lot of energy to get started, but once they get going, it takes hardly any energy to keep them going.

Similarly, while you might feel overwhelmed producing content regularly for a comparably smaller audience, over time your efforts will snowball, making it much easier for your content to drive engagement, attract new members, and delight your audience. It's similar to getting started on social media. Remember how long it took to reach your first one hundred followers? Now think of how long it took you to go from 100 followers to 500, or even 1,000 followers. It most likely took longer initially because you had to build up that crucial momentum. Growing your audience will probably feel quite similar.

Membership sites are a great way to build an audience gradually with relatively less effort than ecourses. The biggest challenge is that they require a long-term commitment if you're serious about growing your audience.

Time and effort: Which Should I Choose?

Ecourses and membership sites are both ideal for a wide range of content creators, but when it comes to time and effort, which one is best for you?

Online Course vs. Membership Site: Pros and Cons

Now that we've talked a little about the kind of time and effort involved in launching an ecourse or membership site, it's time to take a look at the broader advantages and disadvantages of each format.

First, let's talk about the pros of online courses:

Online Courses: Pros

Now that we know what online courses do well, where do they fall short?

Online Courses: Cons

So, what about the pros of membership sites?

Membership Sites: Pros

Just like their online course counterparts, membership sites aren't perfect. What are the downsides to membership sites?

Membership Sites: Cons

Online Course vs. Membership Site: Cost Differences

Now that we've taken a look at the strengths and weaknesses of online courses and membership sites, we need to examine how much it actually costs to produce an ecourse and run a membership site.

Since things can get a little tricky calculating the costs of actually producing the content for your course or membership site, we'll assume for the sake of example that our content production costs are static and equal; we'll just be looking at the costs of selling ecourses and running membership sites.

Online Courses vs. membership sites: comparable costs

If we assume that the cost of actually producing our content is the same regardless of whether we're thinking of launching an online course or a membership site, then we need to look at the actual costs of both beyond the content.

Based on the example figures above, these services and necessary costs would total $806.87 per year.

However, this isn't the whole story. Notice how our example email marketing plan costs $29 per month for up to 2,500 subscribers? If you have more subscribers than this, the cost of your email marketing plan could increase to around $49 per month — that's quite a jump. Same goes for our e-commerce solution. Shopify's basic package costs $29 per month, but the next tier costs $79 per month — an even bigger increase than our email marketing platform.

If you opted for these plans, your yearly costs would rise from $806.87 per year to $1,646.87 — an increase in cost of 68% for very little additional functionality. Oh, and this figure doesn't include flexible costs, such as the percentage of your sales that Shopify takes as a commission or its 30-cent transaction fees, which will also add up quickly — not to mention the hassle of bouncing between multiple sites and dashboards to keep track of everything.

Sometimes it makes sense to use a range of products and service providers to sell your online courses. Power users who want to maximize control over every aspect of their promotional campaigns may well find it worthwhile to pay for a dedicated email marketing platform, especially creators with larger, established audiences. Similarly, content creators with a wide range of digital products may find a third-party e-commerce solution like Shopify meets their needs well. However, it's important to be aware of your options, particularly if you're working with a limited production budget.

At Podia, we want to make it as easy and cost-effective as possible for content creators like you to earn an income selling online courses and membership sites. That's why our two plans offer everything you need to get started selling ecourses. Let's take a look at each of the two plans and how the costs stack up

Podia's 'Mover' Plan

Podia's “Mover” plan is ideal for content creators who want to make and sell online courses.

The Mover plan offers everything you need to sell, promote, and maintain your ecourses in one place. This includes tools to create, sell, and manage your online courses; e-commerce functionality for digital download products such as sales pages and secure checkout forms; email marketing tools to help you reach new customers and grow your audience; and a support team that's here to help you 24 hours a day, seven days a week. Oh, and there are no transaction fees or hidden costs, either

Podia's 'Shaker' Plan

If you're thinking of launching a membership site, Podia's “Shaker” plan is for you.

Podia's Shaker plan offers everything included in the Mover plan, in addition to membership site-building tools. You can create stunning, engaging membership sites to grow your revenue along with your audience, and Podia's intuitive, centralized dashboard makes managing your membership sites and ecourses simple and easy.

Membership sites aren't the only extra feature of Podia's Shaker plan. Podia's affiliate marketing program allows you to create your very own virtual sales team to promote your site or course. Your affiliates promote your content using a unique code, and you choose how much your affiliates earn.

Podia's Shaker plan is ideal for content creators who want to take their content revenue to the next level.

Online Course vs. Membership Site: Differences in Revenue

The final aspect of online courses and membership sites we'll be looking at in this guide is the difference in revenue between the two formats. First, let's examine how revenue works with online courses.

Online Courses: Revenue

As we mentioned earlier, revenue from online courses is primarily transactional. This means that your course is sold in much the same way as a physical product through an online retailer. Whether your ecourse costs $5 or $500, your revenue will be driven entirely by sales of your course. The more people pay for your ecourse, the more money you'll make — it's that simple!

Membership Sites: Revenue

In terms of revenue, membership sites are an entirely different animal to ecourses.

Unlike online courses, which rely on one-off sales to drive revenue, membership sites charge a smaller monthly fee in much the same way as online services like Netflix, BarkBox, Dollar Shave Club, and pretty much every other subscription-based service available.

These companies make money by charging lots of people smaller amounts of money to access their content or products, rather than trying to maximize sales revenue on a per-item basis. Put another way, it might be easier to charge 500 subscribers $10 per month than it would be to sell 50 ecourses at $100 each.

To make these kinds of offers even more tempting, many companies employ a strategy known as “charm pricing,” the practice of making items appear cheaper than they really are, such as selling something at $9.99 instead of $10, for example. This is done in tandem with their subscription business model to further entice prospective customers to cross the line and convert. With its $7.99 basic plan, Netflix is an excellent example of how blending charm pricing with the subscription model can be powerfully effective.

Podia content creator Amanda Boleyn's She Did It Her Way community is an excellent example of how to create and sustain a great membership site. Amanda's content and career advice empowers women to escape the drudgery of their 9-to-5 day jobs and pursue their own business goals as entrepreneurs. As you can see, Amanda updates her membership site frequently, and as the sidebar in the image below shows, members get so much more than just access to Amanda's content; they become members of the Her Way Society, a close, tight-knit community of female entrepreneurs who are actively invested in each other's success.

Although many subscription services are priced with affordability in mind (or, at least, the psychological perception of affordability), some membership sites actively leverage the notion of exclusivity to justify higher price points. This is a powerfully persuasive emotional trigger that can make your site even more enticing.

The other element of membership sites' revenue model that makes it unique is the cumulative effect of subscription revenues. Rather than trying to sell more products, membership sites thrive by attracting more subscribers. This subtle distinction isn't just about measuring success. It should inform everything about how you position and market your content. Remember, you're not just trying to attract new members — you're trying to retain them, too.

It's worth pointing out that Podia's membership sites have one crucial advantage over their online course counterparts, and that's the ability for content creators to bundle additional content into their memberships. This means that subscribers can receive the exclusive members-only content of the membership site, but also whatever other content the creator decides to bundle into membership plans.

Podia content creator Jesse Freeman's Fantasy Console Club membership site is a great example of how this bundling works. While Jesse offers his Game Creator Pro online course as a standalone product, the Pro membership tier of his Fantasy Console Club (priced at just $1 per month) offers all the content you get as a member and access to the Game Creator Pro online course.

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Choosing the Format That's Right For You

Ultimately, choosing whether to launch an online course or start a membership site comes down to how you prefer to work, your revenue and income goals, and the needs of your potential audience. If you want to focus on selling your content as a digital product, launching an online course is the way to go. If you'd rather earn compound income over time as you grow your audience, a membership site is the right choice.

For more inspiration, check out our 72 real-life examples of profitable online courses and memberships.

However you choose to sell your content, Podia can help you achieve your goals. Try a completely free, no-obligation trial of Podia today and see how easy creating online courses and membership sites can be.

Written by

Len Markidan