Things I learned, mostly the hard way

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Things I learned, mostly the hard way

Background

Published my first course in 2015. I now have 14 courses published on Udemy.

My total revenue earned to date is roughly $42,000.00.

My student count is 250,000.

 

Introduction

Udemy is still my #1-course site for selling courses, but that gap gets smaller and smaller with each new year.  Some brand-x course sites are good, but the vast majority are mostly useless. I have roughly a half dozen sites where, when added all together, I generate about what I make in a month with Udemy, but that gap is starting to narrow. Each month my sales go flat with Udemy; the brand-x sites show an improvement. It's not a lot, but when you take anything over $100.00 and multiply it by five or six sites, it starts to add up.

 

A good month for Udemy is $1000.00 or more in a single payout. When you add the payouts from the brand-x sites, it comes in at just under $2000.00 a month, but there are other payouts as well.

 

Publishing houses

I have three publishing houses that pay me royalties every quarter. These publishing houses pay for the marketing and manage all hosting requirements. Every three months, I get a check that averages about what I make a month on Udemy.  I have publishing contracts with three publishing houses in the UK. 

 

Do your research

Every course site or publishing house has reviews posted by instructors.  Do your research and ask questions! I got this email last month.

_____________________________________________________________

 

Seeing if you'd be interested in a sales promotion w/ Huffington Post and our other publishing partners for your courses.

 

You will benefit from:

  • Placement in 225+ publisher stores like the CNN store.
  • Potential inclusion in email blasts to 4,000,000+ tech & online course enthusiasts

You'll get new customers and substantial press coverage.

 

How does this sound to you?

 

Best,

Jimmy

_____________________________________________________________________

 

Sounds great until I did my research and read what others had to say about this publisher.  No thanks!

 

The lessons I learned doing this are:

  • Only sell courses on brand-x sites that use a marketing place similar to that used on Udemy.
  • Use only course sites that reside in the U.S. or UK.
  • Only use publishing houses in the UK.
  • If you don't have at least 12 or more courses, it may not be worth the effort.

I get propositions every month asking me to publish my courses on some site.  I recommend staying away from any brand-x course site outside of the UK, or the U.S. Sites in India are selling courses for pennies on the dollar. When you get a payout for $.26, you're going to be very disappointed.

 

Free course coupons.

If you have issues with trolls or you need to improve your course ratings, blasting out 100,000-free course coupons using Udemy free coupon sites on Facebook will fix the issue.  Slow sales for the month? Set loose 250,000 free course coupons, and don't be surprised when your sales go up.

 

My next milestone is 500,000 student enrollments. I send out free coupons twice a year or when Udemy has a very slow month, or I'm making a single sell for the entire day. As soon as the Black Friday sales end and mid-summer, I send out free course coupons.  Whenever it is slow, send out free course coupons.  Do you want to buy a course from an instructor with 250 students or 250,000 students? Perception is everything.

 

If you can't dazzle students with your brilliance, baffle them with your marketing.

 

When to publish

I publish when the course content is roughly 60-70 percent complete. Then, I send out free course coupons to a few select students, usually my top students that have been with me and supported me from the start. Once the course has been reviewed five times, it's ready for prime time. After that, I continue to work on the course content, and over the next three to six months, I finish the course. When the course is completed, I roll it out to the other course sites and publishers.

 

Yearly revenue

I'm by no means getting rich doing this, but my end-of-the-year total continues to go up. In 2020, I made $26,000 selling courses online. Roughly $12,000 of that came from Udemy.  I'm hoping to break $30,000 in 2021. My milestone is to make $50,000.00 a year selling courses online. That would require at least another 10 to 15 courses. Why the $50,000.00 milestone? Because I enjoy what I do and the I know that sooner or later the money will follow.  Slow and steady wins the race.

 

Courses I stay away from

  • Certification courses.
  • Software courses.
  • Any course where the content is in need of constant updating.

Tax incentive

The way I understand it, I only pay taxes on revenue from courses sold to students that reside in the U.S.  Udemy does a pretty good job of breaking that down at the end of the year, and since my other course sites and publishers are in the UK, they deduct for the VAT taxes.

 

What's the end game?

Chaos reigns supreme. Everyone needs a backup plan. Everyone needs a cushion, someplace they can land and recover from a catastrophic loss.  A little of something is better than nothing.

 

 

 

 

 

 

9 Replies
Salil Dhawan
Community Champion Community Champion
Community Champion

Thank You

Excellent. Thank you.

LawrenceMMiller
Community Champion Community Champion
Community Champion

@Prof_K You said "

Tax incentive

The way I understand it, I only pay taxes on revenue from courses sold to students that reside in the U.S.  Udemy does a pretty good job of breaking that down at the end of the year, and since my other course sites and publishers are in the UK, they deduct for the VAT taxes."

 

If this is correct it is news to me. Where have you seen a breakdown of revenue for only courses sold to U.S. residence? And, why do you think you only pay taxes based on this revenue?

 

My understanding of our tax law and our relationship to Udemy is that we are earning a royalty or commission from Udemy, a U.S. corporation. We are not paid by individual students from more than a hundred countries. Therefore, whatever, income you earn from Udemy is taxable U.S. income, regardless of how that money came to Udemy or from what country. 

 

The implications of what you said is that we would be responsible for paying taxes in every country where our students reside. In my case that would be in more than 150 countries. Good luck with that!

 

 

Lawrence M. Miller
Author/Instructor

Lawrence -

If you'll remember the 2020 fiasco with W2's issued by Udemy, they ended up only reporting revenue earned from students paid to instructors that reside in the U.S. This was the reason given for the change-up after the first W2 was issued.

 

To better answer your question, you can refer to the Udemy Income Tax Withholding information.

https://support.udemy.com/hc/en-us/articles/360034920354

 

From Udemy:

I’m not from the United States, and I pay taxes in my own country, so why does this tax apply to me?

Udemy is based in the United States. All companies based in the US have to comply with IRS (Internal Revenue Service) regulations, which include withholding tax from certain types of income paid to non-US individuals or entities. 

In Udemy's case, we are required to withhold tax from copyright royalties when the student taking the course is in the US. This is separate from any tax you owe in your country.

What will my withholding rate be?

Generally, IRS withholding only applies to course purchases made by students from the U.S. Your rate of withholding will depend on a number of factors, most importantly your country of tax citizenship. We can’t tell you exactly what rate of withholding will apply to your Udemy earnings until your form is submitted and approved, but when we do begin automatically withholding, you’ll be able to see the rate in your revenue report. 

If we have your tax form on file, your withholding rate for these purchases will depend on the details of your submission, including whether your country has negotiated a tax treaty with the U.S.
For instructors in the U.S. who supply a valid W-9 and are not subject to backup withholding, the rate of IRS withholding is 0%.

 

https://support.udemy.com/hc/en-us/articles/360034920354

 

I hope this helps!

 

LawrenceMMiller
Community Champion Community Champion
Community Champion

@Prof_K OK, you are saying two very different things or I am reading two different things. Your first comment was that you were only taxed on "students" who paid in the U.S. This is the case for instructors based outside of the U.S. Your second comment is about where the instructor lives. Two completely different things. So, I hope we agree that if you are U.S based instructor, you are taxed on ALL the income you receive from Udemy, regardless of where the students are. If you are based in the UK, Udemy withholds taxes based on only U.S. students. 

 

Right?

 

Lawrence M. Miller
Author/Instructor

Negative Lawrence, I said what I meant to say. If you have a question on how Udemy calculates your taxes, you should speak to someone at Udemy.

 

I read the Udemy tax policy to say that U.S. instructors that reside in the U.S. and instructors that reside outside the U.S. that are paid royalties from a U.S based company (Udemy) pay U.S. taxes based on the royalties they earn from students that reside in the U.S. Again if you need more clarification, please get in touch with someone at Udemy.

 

 

 

LawrenceMMiller
Community Champion Community Champion
Community Champion

I do not have a question, or I didn't have a question, regarding how Udemy calculates taxes. My 1099 that I receive from Udemy is virtually the same as when I add up my monthly earnings for the year. It is always different slightly and I never bothered to worry about why that is. However, I have no way to be certain of this, but when I look at my enrollments at least half of them are from outside the U.S. If that's the case, my 1099 should be about half of my revenue for the year. It is not. 

 

The reference document says....

 

As a U.S.-based company, Udemy has to follow guidance from the U.S. Internal Revenue Service to determine if tax should be withheld from instructors’ monthly payments.

I’m not from the United States and I pay taxes in my own country, so why does this tax apply to me?

Udemy is based in the United States. All companies based in the US have to comply with IRS (Internal Revenue Service) regulations, which include withholding tax from certain types of income paid to non-US individuals or entities. 

In Udemy's case, we are required to withhold tax from copyright royalties when the student taking the course is in the US. This is separate from any tax you owe in your country.

 

This is all about instructors who reside outside the U.S., no those who reside inside the U.S. So, I am assuming what you are saying is correct if you reside in the U.K. What I am saying is correct given that I reside in the U.S. 

 

Right?

Lawrence M. Miller
Author/Instructor

Dear @Prof_K ,

 

Thank you so much for sharing your story! 

 

It is great to hear that you succeed with free coupons.  Many instructors choose to avoid that path, because:

- free coupons tend to attract the kind of people who will not enrol later into paid courses

- those people tend to give lower ratings - since they didn't pay for the course, they could easily enrol into something that they don't value, and therefore are more likely to rate it badly.

 

As a side note - you may already know it - there is an easy way to spot whether a large number of students come from free or paid enrolments.  Look at the number of reviews - for the paid students it should be somewhere around 30% of enrolments, more or less. 

For example:  15K enrolments and 5K reviews  - probably all those enrolments are paid enrolments. 

Else, if the number of reviews is an order of magnitude less than enrolments - it probably means the instructor has given away free courses. 🙂

 

With kind regards,

Vlad.

 

Thanks for sharing your story. I will pickup on some of the points. 

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