What to Know Before Starting a WordPress Plugin Business

WordPress powers over 28 percent of the web. With that comes 150,000 plugins and themes, which adds up to over 1.3 billion downloads on WordPress.org alone. It’s truly a powerful platform that can allow for a lucrative plugin business. However, when we examine the space more thoroughly, we find that only less than 5 percent of the products have a paid offering. You may think that these 5 percent own 99 percent of the market, but it’s actually far from it. The monetized items are only 22 percent of total active items. The vast majority of installed and active plugins and themes in the WordPress market actually have no paid offering.

Most WordPress Developers Can’t Jump (Do Not Monetize)

Technically speaking, developing open-source distributed software like a WordPress plugin or a theme is fairly easy. A combination of PHP and JavaScript/HTML and basically that’s it – you are ready to roll out your WordPress product! No need for servers to run your software, you don’t necessarily need to know much about databases, and object-oriented programming is not even required. In fact, many of the most popular plugins and themes in the WordPress ecosystem were built by self-taught developers.

Yes, this is a generalization as there are some very complex plugins with a lot of logic, and there are “Serviceware” plugins that are wrapping a cloud service. But those are the exceptions.

In some way, WordPress has not only democratized publishing, but it has also democratized development. The combination of a loosely typed backend language like PHP, excellent documentation, and the ability to leverage others developers’ GPL code turned tens of thousands of WordPress users into junior level coders.

It should be noted that the fact that you don’t need a server in order to offer your product in the WordPress.org repository is a double-edged sword. It makes the development and the maintenance of the project relatively light, but it’s also very limiting. So when it comes to turning a plugin or a theme into a commercial product (i.e. plugin business), that’s a whole new story. Technically, it’s way more complex and time-consuming than actually building the plugin/theme, and the absurd thing is that it has nothing to do with your module’s features.

Top (Technical) Challenges In WordPress Products Monetization

After spending over two years working closely with developers, and learning about their pains, we identified the top technical challenges involved with monetization. Here are the things we’ve learned at Freemius:

Collecting Payments

This one is kind of obvious, if you want to start a theme or a plugin business, you’ll have to charge money. There are so many different aspects and moving parts to accepting payments that it’s hard to know where to begin.

The simplest solution would be to sign-up with a payments gateway that offers a standalone checkout solution like PayPal (assuming PayPal is supported in your country). You’ll be able to create a custom checkout link and add that link as an upsell on your preferred spot in the free plugin version (it should convert better).

While this is a good start for collecting the first dollars, this is far from being robust. All of the popular gateway solutions like PayPal, Stripe, Braintree, or Authorize.net won’t host your Pro code, won’t handle licensing management, and the best you’ll get from them, besides the actual transaction processing, is an email notification about a purchase. To automate that process, you’ll have to integrate the API of those services to your product and trigger processes to expose the pro version download link, or to automatically email the zip after a purchase.

You can try to implement those API callbacks inside your free software, but it means that you will be giving away your licensing and ‘post payments processing’ logic to anyone out there. If you want to secure this mechanism, it will have to run on your backend, and it should be synced with your licensing layer logic.

Software Licensing

Once a user gets their hands on your Pro version, if you don’t have any licensing mechanism in place there’s nothing you can do to prevent them from using it on multiple sites, sending it to friends, sharing it on Facebook, or even uploading it as a torrent to the internet.


The clear reason why you should care is loss of revenue. If you are selling a per-site license for $100 a year, and one customer installs their single copy on 10 different sites, then you will have just $900 left on the table. Another big reason is support. If you provide priority support to paid customers, how will you know if the person who contacted you is a real customer or just downloaded your code as a torrent?

If you want to protect your paid offering and not base your licensing only on trust, you need to have a licensing management layer in place, making sure only paid customers will have access to your paid software.

Secure Code Hosting

Due to the “everything should be free” restrictions of the WordPress.org repository, hosting premium plugins or themes on the repository is forbidden. It’s even more strict than that. When offering a freemium product, the paid features of your product are not allowed in the repository, and must be stripped before each commit.

You can either sign-up with one of the popular Git services like GitHub or BitBucket, or host it without any versioning solution on a cloud storage solution like Amazon S3. Whichever hosting you choose, you’ll need to write a permissions layer to restrict access to the repository/cloud-files only for customers that have a valid license.

Software Updates

The good news when it comes to version updates is that WordPress comes with a software updates mechanism as part of the core. Unfortunately, this mechanism only works with the official WordPress.org API, and therefore you will not be able to take advantage of it for your pro code .

Since the pro code must be stored on an external repository, an additional logic layer is required in your pro code to manipulate the default software updates mechanism to work with your API endpoint. And yes, you’ll have to develop and expose your private RESTful API endpoint to the software updates mechanics. The logic behind that endpoint should check if the calling site has a valid license. If it does, check if there’s a newer software version and return a secure URL for downloading the latest pro version.

If you want to make this API secure you’ll have to set up an SSL, and add authentication and authorization layers. Does this have anything to do with the core of your plugin or theme? Absolutely not. But it’s part of the deal if you want to monetize on your own.

Analytics & Usage Tracking

WordPress.org is an amazing repository and one of the key components that make WordPress a huge success. Having a plugin listed there is awesome, but something you don’t get much of is data.

As a developer, all you get is the number of downloads and an estimated count of active installs, but who, what, where, how and why? Not so much. This means that most of the development decisions developers make will be based on gut feeling and guesswork, rather than data.

Moreover, the WordPress.org philosophy is against any automated usage tracking. Even adding a disclaimer in the terms of use is not sufficient. If you read the official guidelines, it clearly states that developers are not allowed to “phone home” without the user’s permission. Thus, tracking any usage of your plugin or theme is tricky – it requires explicit opt-in consent from the site owner. And so, the vast majority of the plugin & theme authors are “flying blind”, relying solo on their gut feeling and biased user feedback, many times preventing them from advancing and growing their own products.

Some developers have little to no knowledge when it comes to topics such as user experience and how to create intuitive products, so as you can imagine, some WordPress products suffer from a very poor UX and are very challenging for the end-user to handle. In fact, based on data we captured from over hundreds of plugins and millions of plugin installations using Freemius Insights. 20 percent of plugin uninstalls are related to bad FTUX (first-time user experience). A user installs a plugin and then has no clue what to do next.

That’s quite surprising due to the fact that every 4th website is WordPress, on average every WordPress website runs 17.6 active plugins and one theme, so literally, 28% of the web is powered by developers who are shooting in the dark, because they have no usage data about their software.

That’s Not All

Unfortunately, the above-mentioned points are just the tip of the iceberg. If you want to automatically send invoices, provide free trial periods, support service subscriptions, sell to European customers or sell from Europe, things are going to get quite messy pretty fast.

“When we launched CalderaWP, we sold about $350 worth of plugins the first month. It was only then we even considered that making plugins and selling plugins were two totally different skills, said Josh Pollock, owner at CalderaWP.

Top (Non-Technical) Challenges In WordPress Products Monetization

Marketing

Let’s imagine for a second that your free WordPress plugin or theme is installed and activated on 1,000,000 websites. You have no clue who is using it. In a perfect world, you could email them directly about your cool new features in the Pro offering. But unfortunately, you don’t have their emails or any other direct communication channel.

So how do you drive traffic to your checkout page?

This is where your marketing skills need to kick in. The most efficient way to leverage your 1,000,000 existing websites would be adding marketing material in the plugin settings on the admin dashboard.

Unfortunately, you won’t be able to get to all of the site owners. Only users who upgrade to your latest software version and navigate to the settings page, where you added your marketing copy, will get exposed to the upsell. To expand on that, you’ll probably want to start your own website, write some content for SEO, try attracting potential customers through search, do some inbound social media marketing, etc.

“I didn’t sign up for this! I just wanted to make some money building cool features..” – well, if you want to sell on your own, you are the one responsible for getting users to your checkout. They are not likely to just show up and knock on your door. If you don’t have any marketing experience, you’ll need to read a LOT of articles and do a lot of testing. Don’t get me wrong, it’s doable, and it’s not rocket science – just more stuff you need to learn and handle.

If you have the money, an alternative option is hiring someone else to do it for you.

“There are many ways to monetize your plugin but if you’re not a marketer by nature or experience, finding the method that will work best for you and your team can be time consuming at best. My advice is not to recreate a full eCommerce platform but rather choose one that already exists specifically for plugin developers,” said Adam Warner, Co-Founder at FooPlugins.

Support

Running a free side project is fun. No obligation to anyone, you can ditch the project whenever you like, and generally, users shouldn’t have high expectations for support. “Use it at your own risk” type of software.

When starting a WordPress plugin business and there’s money switching hands though, that’s a whole other story. Even if you highlight in capital letters that there’s “NO SUPPORT,” customers will expect you to help them out and solve the issues they are experiencing.

It depends on what your product is, but very quickly you’ll realize that 50 percent of your time is dedicated to support. Not to developing cool features, as you may have imagined when you first embarked on this journey. Handling customers can be hard, especially when you are not in your best mood. Also, if you are running solo, it means that if you are sunbathing on a beach in Mexico during your annual vacation, you still have to be alert and resolve support tickets almost in real time. You can’t email your customers saying: “Hey guys, I’m on a two-week vacation in Mexico, so good luck and hope there won’t be any issues. Adiós Amigos!”.

Having great support is super-important for your brand. If you’ll provide inadequate support, customers will stop using your product and will talk smack about your service in public forums. Moreover, very quickly the 4.7 stars average rate that you’ve been working so hard on during the past 12 months will plunge down to 3.2, even though your support is only related to the pro offering. Why? Because users don’t realize (and don’t care) that the reviews on WordPress.org should only relate to the free offering listed there.

“Building a WordPress plugin that people are willing to pay for isn’t easy. You can definitely get some minimal residual income just by creating a “Pro” version of your Free plugin. But if you want to actually build a career out of it, you have to have multiple skills — which most likely means creating a team of partners. Coding is just a portion. Anecdotally, I’d say 2/8 code, 3/8 Support, and 3/8 Marketing. If you give too much attention to any one of those areas then the others suffer. Finding that balance is tricky and takes time and continual monitoring,” said Matt Cromwell, Head of Support and Community Outreach at WordImpress.

Conclusion

On top of the technical challenges, coders suddenly need to become marketers (and designers, and content writers, and SEO experts, and security specialists, and support representatives). Add that to the fact that if you would like to monetize on your own you will have to get some servers spinning and dive into some serious backend work. Many realize it’s just way too overwhelming, and quit before they even get started.

“I constantly hear from developers that are looking to monetize their plugin, but don’t know how. Not just at the transactional level, but also marketing and promotion of their software. Passive income, in this case, is not as easy as simply uploading to WordPress.org,” said Matt Medeiros, Founder at Matt Report.

If you have ever considered walking the path of making a sustainable business out of your WordPress plugin or theme but then became reluctant to do so once you realized all of the challenges it involves – I would like to recommend that you download & read our free “WordPress Plugin Business Book”. This book will gradually help you learn what’s necessary (and what’s not) to constantly acquire new plugin users, and what to do in order to convert those users into subscribed, paying customers. From evaluating the market’s size and picking a great niche and idea for your WordPress plugin, through what exactly to do before and after you release it to the world.

Oh, and not less important – how to enjoy this ride.

Sell away!

Vova Feldman is a serial entrepreneur, full stack developer, and the founder of Freemius, a monetization platform that empowers WordPress plugin and theme developers to build prosperous subscription-based businesses. P.S. Like to learn how to sell plugins in the subscription economy? Check out this free WordPress Plugin Business Book.

The post What to Know Before Starting a WordPress Plugin Business appeared first on Torque.

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