Udemy Business Model: How It Works

Udemy Business Model: How It Works

Achieving career goals became a challenge before the Corona pandemic. You can be a professional with years of experience or a student who has graduated from college and wants to join the workforce. After the epidemic, companies are only looking for the best talent in all areas. So you need to acquire new skills according to the needs of your industry. But there is a challenge. TIME. Interested in joining 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 online digital platforms like Udemy meet your needs by offering more than a million online courses from renowned instructors at a modest price. After browsing the Udemy website and being satisfied with the courses offered, are you thinking about the Udemy business model? How does this platform generate money? Then you are exactly right with us. Stay tuned and you can get the perfect details. Let us know about Udemy first, and then we’ll get to the topic of this article, shall we?


This platform is a combination of two words – You and Academy – and has gained worldwide recognition. The reason for this is that it facilitates the process of online learning without a brick-and-mortar institution. Little did its founder, Eren Bali, know that his idea would spark a wave of online digital platforms that would transform the entire educational landscape. There are currently 1,30,000 online courses. With that last sentence, let’s quickly move on to the Udemy business model.

Marketplace business model by Udemy

Similar to Amazon and Flipkart, Udemy also organizes various lecturers’ courses on its online platforms and sells them to deserving students. Udemy is a simple platform for the instructors to showcase their courses and, as per its policies, does not own the content. In fact, even the prices for each online course are set by the instructor. However, Udemy charges fees for administration services and various marketing options. Now let’s turn to this topic.

How does Udemy generate money through its business model?

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

There is no fee for the instructor to host his/her course on the platform. However, a student may have to pay fees to attend a particular course. The cost structure of a course that Udemy uses to generate revenue is through the acquisition of a student. The procedure is as follows:

  1. A popular teacher will attract most of their students through word of mouth or positive reviews. The instructor can also promote their own courses and get students to sign up for the course via a coupon. In this situation, he/she receives 97 percent of the total course fee. Udemy only charges a 3% administration fee.
  2. Udemy can also promote a course through YouTube, Google, Facebook, and various methods. If a student decides to take a course through a channel, the instructor must 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 on a channel. The instructor can also set the type of channel on which their courses can be shown to the public.
  3. When a course is selected through the Android or iOS app, the platform takes 30 percent of the total fees.
  4. Let’s say a student comes to the Udemy website and decides to take a course without an instructor’s coupon. Then the course fees are split 50 percent between the instructor and Udemy.

Do you know Udemy’s business model, designed exclusively for small to medium sized businesses and large organizations? Called Udemy for Business, it offers training for employees to develop their skills. There are two plans in this type called Team Plan & Enterprise Plan.

  • Team Plan – is aimed at companies with a workforce of 5 to 20 employees. Yes, there is an annual membership and the minimum requirement should be five users.
  • Business Plan – Designed for businesses and organizations with 20+ employees. The prices may vary depending on the course selected and the duration of the training.

Udemy has also granted a two-week trial period for both plans. If the company does not find the training satisfactory, they may choose other options.


Udemy’s revenue-generating model is impeccable and extremely attractive not only to the faculty but also to the students. The main reason for Udemy’s success is to provide value, convenience, cost reduction, brand recognition and easy accessibility not only for the student but also for the instructors. Also, the platform offers a variety of technical features that are freely available for instructors to host their courses and provide training to students.

Overall, Eren Bali has realized his dream of offering online courses to those in need through his digital learning platform. His model has resulted in more than a million professionals and students acquiring new skills through courses on the Udemy platform. According to recent news on the site, the payment structure for instructors is bound to change. Yes, there will be more changes in the future, but until then, let’s salute Eren Bali and his platform for causing a revolution in the education industry.

Thanks to Sathya Narayana | #Udemy #Business #Model #Works


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