How Much Should I Charge For My Online Classes?
As an independent teacher, you need to set your own learning product and its price. How much should I charge my students? Should I raise the price every year? Have I set the right price for my teaching? Answers to these questions can impact your teaching business directly. In this blog, we will look at
- Three ways of thinking to set your teaching price.
- Two models to structure your online lessons.
- How much do platforms like VIPKid charge?
- Price package and trends.
- How to figure out an optimal price.
At the end of this blog, I offer independent teachers a few steps to consider in order to reach an optimal price over long term.
Three ways of thinking to set your teaching price
As an independent teacher, you have the complete flexibility to structure your class duration, teaching format, package etc. You don’t necessarily need to follow what platforms did. Instead, you can work out what suits you and your client.
There are a lot of factors to consider when you price your lesson, for example: what is the cost of living where you live, what is the economic situation of your client, how long you expect the student to stay with you, how you package your lesson, etc.
In general, there are three ways to price a product or a service:
- Cost-based – you set the price of the product based on how much it costs to provide it;
- Market-based – you set the price of the product based on similar products on the market;
- Value-based – you set the price of the product based on perceived value from the client’s perspective.
It may be best to use a value-based approach, which our digital course ‘Build a Successful Independent Teaching Path’ addresses.
This blog uses the second approach – market-based pricing. We will look at what some well-known online ESL platforms charge their students. The eight companies we have collected pricing information from are VIPKid, GogoKid, DaDaABC, Whales English, PalFish, SayABC, Magic Ear and Qkids.
By looking at their price ranges, you can understand how clients have set their budgets for a similar learning experience. Information like this can help you set a reasonable (if not optimal) price for your lessons.
Source of image: https://www.behance.net/gallery/120786715/Bold-line-style
Two models to structure your online lessons
Before we look at prices, let’s look at two ways to organise your online classes: a 1-1 format or a group format. You can choose a model where you and your students feel more comfortable, balancing quality and affordability.
Platforms such as VIPKid, GogoKid, DadaABC and PalFish follow a 1-1 class format.
For group lesson format, we have Whales English which has 1-2 (1 teacher, 2 students) classes and a few others that run a 1-4 (1 teacher, 4 students) class format such as SayABC, Magic Ear and Qkids.
Their students are between kindergarten age and secondary school age. DaDaABC covers a wide age range (from 4-year-old to 16-year-old) while Magic Ears serves the narrowest age range (from 5-12 years old).
The general impression is that education can be most personalised through a 1-1 teaching/learning approach, but the group format offers a more affordable price for students and their families.
How much do platforms like VIPKid charge?
Here I have collected pricing information from eight Chinese online ESL platforms which you can use as a reference point. This is what you can do as a generalist. However, if you have become a specialist, delivering unique value to your clients, you can have much more room to set your own price. (This will be addressed in our digital course ‘Build a Successful Independent Teaching Path’.)
As each platform structures its learning package and lesson differently, I have used the formula of ‘Price per minute’ and ‘Price per year’ to keep things consistent and comparable.
The price per minute helps you as an independent teacher to estimate how much you can charge for each class you deliver. (See infographic ‘Price range of ESL online classes by platforms’).
1-1 Class format
- VIPKid: RMB5.6/minute (US$0.9/minute)
- GogoKid: RMB5.4/minute (US$0.83/minute)
- DaDaABC: RMB4.0/minute (US$0.64/minute)
- PalFish: RMB3.2/minute (US$0.51/minute)
1-2 Class format
- Whales English: RMB4.0/minute (US$0.64/minute)
1-4 Class format
- QKids: RMB1.2/minute (US$0.19/minute)
- Magic Ear: RMB2.4/minute (US$0.38/minute)
- SayABC: RMB3.2/minute (US$0.48/minute)
The price per year helps you understand the perspective of your client – how much they must take from their annual budget to get an educational experience from the platform. (See infographic ‘ESL annual package cost by platforms’.)
The Whales English platform charges a low price per minute. But as their classes are 50 minutes instead of 25 minutes, their annual package cost is almost on a par with what VIPKid charges.
1-1 Class format
- VIPKid: RMB24,000/year (US$3,840/year)
- GogoKid: RMB20,480/year (US$3,277/year)
- DaDaABC: RMB20,680/year (US$3,309/year)
- PalFish: RMB8,320/year (US$1,331/year)
1-2 Class format
- Whales English: RMB20,800/year (US$3,328/year)
1-4 Class format
- QKids: RMB3,744/year (US$599/year)
- Magic Ear: RMB6,240/year (US$998/year)
- SayABC: RMB12,480/year (US$1,997/year)
However, I would like to point out that this annual figure does not fall into an independent teacher’s pocket automatically. There is a shift of consumer spending behaviour changed which I will address in the ‘2021/2022 Chinese K-12 Education Trends’ report. This gives a base for you to set a reasonable price now.
Figure out an optimal price
Here I would like to emphasise that what this blog does is to give an independent teacher a reference price point. But this is different from getting an optimal price. Pricing discovery is a dynamic process: the more you understand your clients, the better you can shape your lesson (learning product) and the better your pricing structure.
To discover an optimal price, it is very valuable to see things from a client’s perspective. This is an interesting example of how teacher Paige learns from her parenting experience and uses that perspective to decide her own online teaching pricing.
Lessons form a learning unit. Units complete a learning level. Levels accomplish a learning path. The infographic below – ‘learning progress & curriculum choice by platforms’ – can inform you how platforms structure their students’ learning journeys and sell their learning packages.
Can you increase your lesson price every year? Yes, some platforms do, some don’t. So again, this will be an interesting decision to make.
VIPKid and Whales English had an almost 20% increase if you compare their 2020 price to the 2019 price. That was partly to cover their loss from massive sales and marketing costs. So when you make your annual price adjustment decision, it is probably a good idea to check your financial record for your business and forecast your future financial numbers.
Setting your optimal price as an independent teacher is a process. To conclude I suggest a few questions independent teachers consider:
1. What kind of teaching you will be doing: 1-1, or group?
2. How your teaching compares to a similar platform product in terms of price per minute and price per year?
3. How you may change your pricing over time?
4. What is your reference price in short term?
5. How to determine an optimal price, by looking also from the client’s perspective, in long term?
Join our digital course ‘From Good to Great, Level Up Your Teaching Business’ to empower you to develop a sustainable and successful independent teaching career. Read our course page to find out more.
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Teachers, Be Fearless!