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How do platform fee structures affect creators' platform choices?


C-suite at creator economy company

Guest: It's probably one of the key differentiators, between platforms that charge a monthly fee versus platforms that make most of their money on transaction fees.

The way that we see it manifesting is creators who are entrepreneurial and are committed to starting a business tend to be more willing to invest in a tool: “I invest in that tool upfront and then see that as a cost of business.” This type of creator18 will choose something like Podia or Kajabi.

Gumroad, and generally fee based platforms, obviously have a much lower barrier to entry for people who want to get started. So what often happens is that people will choose a tool like Gumroad for testing an idea: “I have this idea for an ebook, or I have this idea for a course or some kind of paid download. I'm going to test it on Gumroad because there's no risk involved. I'm just going to put it on there and see if anybody buys.”

What we often see is that there's an income threshold at which creators will switch from something like Gumroad to Teachable, to Podia, to Thinkific, to Kajabi, because they're seeing that the paying a monthly fee for a fixed and predictable cost, will be cheaper for them in the long term, than paying for transaction based variable cost. 

The transaction fee pricing disproportionately benefits creators who are starting from zero and want to just test something. Then at one point, it disproportionately benefits the platform over the creator.

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