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Udemy business model: how it works

Achieving your goals through career has become a challenge before the Corona pandemic. You can be a professional with years of experience or a student who has passed out from university and wants to enter the world of work. After the epidemic, companies are only looking for the best talent in all domains. Therefore, you need to acquire new skills as per the requirements of your industry. But there is a challenge. WEATHER. Do you want to join an institute or college for new courses? Then you have to juggle between your job (as a professional) or attending classes (as a student). But, digital online platforms like Udemy cater to your needs by offering over a million online courses from renowned instructors for a low price. That being said, after browsing the Udemy website and being satisfied with the courses offered, are you thinking about Udemy’s business model? How does this platform make money? Then you have come to the correct place. Stay tuned and you can get the perfect details. Let us know about Udemy first, and then we’ll move on to the topic of this article, okay?


A combination of two words: You and Academy, this platform has gained worldwide recognition. The reason, facilitates the online learning process devoid of a physical institution. Little did his founder Eren Bali know, his idea will trigger a wave of online digital platforms that will change the very landscape of education. Currently, it has 130,000 online courses. With the latest award, let’s fast forward to Udemy’s business model.

Udemy Market Place Business Model

Like Amazon and Flipkart, Udemy also hosts the multi-instructor courses on its online platforms and sells them to students on the service. Udemy is a simple platform for instructors to showcase their courses, and as per their policies, they do not own the content. In fact, even the prices of each online course are decided by the instructor. But Udemy charges for administrative services and various marketing options. Let us now focus on this topic.

How does Udemy make money through its business model?

Udemy even offers free courses. However, it is on the basis of paid courses, this platform generates revenue of 2 billion every year. A student can opt for the courses in more than 80 languages. Furthermore, the business model is divided into two impeccable types. The first type is for an individual, and the second, for companies.

There is no fee for the instructor to host your course on the platform. But, a student may have to pay fees to attend a specific course. The course cost structure by which Udemy generates revenue is through the acquisition of a student. The process is the following:

  1. A popular instructor will attract most of their students through word of mouth marketing or rave reviews. The instructor can also advertise their own courses and have students sign up for the course via a coupon. In this situation, he/she gets 97 percent of the total course fee. Udemy charges a 3% administrative fee.
  2. Udemy can also promote a course through YouTube, Google, Facebook, and various other methods. If a student opts for a course through a channel, the instructor will have to part with 75 percent of the total fees. However, Udemy gives the instructor the freedom to limit the number of times a course is displayed in a channel. The instructor can also decide the type of channel where their courses can be displayed to the public.
  3. If a course is selected through the Android or iOS app, the platform gets 30 percent of the total fees.
  4. Let’s say a student lands on the Udemy website and opts for a course without any coupon from the instructor. Course fees are then shared 50 percent between the instructor and Udemy.

Are you aware of Udemy’s business model designed exclusively for small and medium-sized businesses and large organizations? Called “Udemy for Business,” it offers training for employees to develop their skills. In this type, there are two plans called Team Plan and Enterprise Plan.

  • Team Plan – Serves companies with a workforce of 5 to 20 employees. Yes, there is an annual membership and the minimum requirement must be five users.
  • Company Plan – Designed for companies and organizations that have more than 20 employees. Prices may vary depending on the courses selected and the duration of the training.

Udemy has also provided a two-week trial period for these two plans. If the company does not find the training satisfactory, it can opt for other options.


Udemy’s revenue generation model is flawless and extremely attractive not only to the instructor but also to the students. The main reason Udemy is successful is to provide value, convenience, cost reduction, brand recognition and easy accessibility not only for the student but also for the instructors. In addition, the platform offers a wide variety of free technical features to instructors to host their courses and provide training to students.

Overall, Eren Bali has realized his dream of providing online courses to those in need through his digital learning platform. Her model has made more than a million professionals and students acquire new skills through the courses on the Udemy platform. According to recent news on the website, the payment structure for instructors will change. Yes, more changes will happen in the future, but until then, let’s salute Eren Bali and his platform for causing a revolution in the education industry.

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