Selling WordPress Add-Ons: Is it the Best Business Model for Your Plugin or Theme?

Hi everyone, I’m Ben from Freemius. If you have ever been a child, you have probably played with or at least heard of this – Lego blocks might be one of the world’s most successful toys ever created.
The great thing about Lego is that it’s so simple to play with there is no limit to
what people can do with it. How does all of that relate to your WordPress plug-in
or theme? Think of it this way – the core features of your plug-in or theme are like a basic Lego board and add-ons are features that extend the capabilities of
your plug-in. Each of the add-ons can be bought separately but none of them can work without the basic core features. In this video, I’m going to explore what the
add-on model means for the pricing and development of your product and ultimately how this can affect the sustainability of your business. Let’s plug in! Many big players in the world of
WordPress like OceanWP with themes or Ninja Forms with plugins, have managed to build their businesses using the add-on monetization model. But, before you consider this model for your plug-in or theme, we need to dive deeper and explain
some of the pros and cons of using the add-on model from both the business and
technical perspectives so you will be able to decide for yourself whether it suits your product or not. We’ll start with the bad news. First of all, from a technical standpoint, making a small change in the code of your core product
may cause compatibility issues with some or all of your add-ons. Also, when developing a product with many add-ons you are forced to make it very flexible
by using a lot of actions and filters AKA WordPress hooks. This can cause meaningful increase in system resource consumption, since every hook triggers the “do action” logic. Basically, you’ll have to maintain and
update all your add-ons individually and make sure that they remain lightweight and flexible for your users. Let’s move on to the business downsides. First and foremost – you can’t charge for an add-on like you would on a full-on premium product. When selling a set of premium features, you can charge for all of them in one plan or tiered premium plans but no matter the plan, you most likely
won’t make more than $150 per customer per year. That isn’t the case with add-ons. If all of your features are sold separately as extensions, it would be very hard to sell any of them for $150 alone. Based on the market benchmarks, the most you’ll be able to charge for single add-on is $70 for a single site license. Another downside is the fact that according to many long-term plugins and themes veterans, that have been selling add-ons
for years, around 80% of your revenue will be generated from 20% of your add-ons. But, regardless of that, you’ll still have to maintain the not so profitable 80% of your add-ons sometimes with very few customers using them at all. Going with the add-ons model can also create marketing issues. When using the freemium model, you can focus on marketing only the best features of your product. With the add-ons model you may have to market each and every product individually No matter how small its functionality may be. Otherwise, no one will buy those un marketed add-ons. That means a lot more time is consumed
on marketing. It’s like having many small products instead of one. Finally – having many separated features for your product can sometimes be confusing for potential customers. Many users do not know what they really need or what is the best starting point for them. Paid plans called “Starter” or “Personal” can help
guide users to the right place instead of offering too many choices which can
be distracting and frustrating leading to lower conversion rates now after
discussing the downsides of the add-on model let’s start talking about all the
bells and whistles of selling your plugins or themes with adults one of the
best things about Adams is that only the essential features of a product are
necessary to run the basic version of your product exactly like the simple
plastic square with round bumps on top of it using the add-on approach plugins
and things become much more modular which makes each one easier to test and
debug when you need to make changes to specific add-ons you don’t have to
release a new version of the core plug-in or theme you just push an update
for the required arrow this modularity compels you to code the lightweight core
product which can be very beneficial later on when your product grows
becomes more complex on the business side of things
there are also some great advantages to the error model instead of buying an
expensive premium plant with a lot of unwanted features your users can choose
their preferred features alikom and pay by the arrow this makes it easier for
you to sell your products because your user can customize the solution they
need without paying for extra features to help illustrate this when selling
premium only products it’s very difficult to display more than five
plans side by side on screen unless your plug-in or theme features exceptional
functionality that no one else has the price you can ask for premium plan is
generally limited to the established market range which is typically no more
than $200 for you with the arrow model you have much more flexibility in your
price and in theory can make more money if you have a hundred add-ons for
example that you sell for $10 each one user can potentially buy all of them for
$1000 a year but you’ll probably want to give a friendly package discount in
these situations now let’s go back to marketing I know I said before that
marketing add-ons individually can be more time-consuming than marketing them
is free but it also has the potential to be more effective promoting each atom
individually can increase traffic to your website and let you focus on the
advantages of each add-on in your marketing strategy additionally if one
of your add-on provides an integration for a third-party solution it’s usually
a good idea to partner with that third-party so they can list your
product on the platform this shows their customers that they are covered when
they use your product in combination with theirs and it’s a great market
collaboration opportunity for youth finally assuming your core product code
is well-documented and was developed with extensibility in mind other
developers will be able to extend your product beyond what you can even imagine
by creating their own add-ons for your product the next step would be to offer
them to market their extension on your site charge them an affiliate commission
which is usually between 15 to 30 percent now that you’ve heard all the
pros and cons the decision is up to you just keep in mind that the vast majority
of wordpress products my niche solutions with limited functionality therefore in
most cases structuring your WordPress product as a core product with add-ons
is probably the wrong way to go then confused or not sure you can use
this rule of thumb if you see a plug-in or theme as a platform that can
facilitate many use cases and integration and you can imagine tons of
different features and extensions to it then I would definitely suggest going
with the add-ons model don’t forget to make it shine like a Lego brick no
matter which monetization model you choose the worst thing to do is over
optimize it we suggest following the data and by a be testing a perfect model
on potential customers if you sell with freemium you can easily adjust your
pricing in the developer dashboard to allow you to test what pricing levels
work best for you and your customers you can even work with your development team
to separate some of your premium features and put them into their own
atom so you can test this model if you liked this video and want to get more
advice and best practices from the experts here 3ms be sure to subscribe to
our YouTube channel and blog feel free to ask us any questions in the comments
below and if it would be a really good one we might turn your question and our
answer into a video thanks for being a part of a community
and see you next time

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