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freemius_vs_envato

Freemius vs. Envato

You've built the perfect theme or plugin, you've put blood, sweat and tears into the building, countless late nights and even more cups of coffee. Laptop lids shut in anger at a seemingly stupid bug that takes days to solve instead of hours and the grind of building something for yourself. Then at last it's complete and you are ready to get it out on the market. But how? Do you use a marketplace and compete against thousands of others which also hands over most control, or start your own site?

In this article, we'll explore the positives and negatives of both along with why you should use Freemius if you decide to sell on your own website.

 

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Selling On Envato

Envato is an online marketplace made up of multiple different sites all specializing in different things; from Themeforest for themes and templates for WordPress, Magento and beyond, to CodeCanyon for WordPress plugins, PHP Scripts and apps, right through to GraphicRiver for stock images and 3D assets.

If you've developed a WordPress plugin you'd be submitting that to CodeCanyon. If you've developed a WordPress theme, you'd be submitting that to ThemeForest. Traditionally you'd be more likely to have success with a well developed and designed theme on ThemeForest than you would with a well thought out plugin on CodeCanyon.

When you sell on Envato, you are in a sea of other competing products with similar features, for instance WooCommerce plugins are common on CodeCanyon and trying to break into that area now is extremely difficult. In addition, if you have a niche plugin that is useful to a certain subset of users you may find it hard to gain traction. One of the best ways to gain traction is through the weekly top seller's list on each respective Envato site. Breaking into this list with a niche product can prove difficult. On CodeCanyon you may need to sell 50 units, but on ThemeForest, you'd be looking at selling hundreds a week to get anywhere near the top with some of the most popular themes selling a thousand or more week in week out.

 

  • Rules

The rules of the Envato marketplace are ever changing. With a range of rule changes over the years, and they are very restrictive on what you can and can't do even from a buyers perspective. For example, if a buyer wants to use the theme on a multisite you may be fine with that but Envato rules don't allow this usage, and it could end up being a sticky situation for both you and your buyer. You can find the full Envato rules here but be warned that you'll need a good couple of hours to read through them all probably and if you're planning on selling on Envato I'd strongly recommend you take the time out to do that.

 

  • Fees

The fees are an ever confusing aspect of Envato websites and have confused people for years. One of the main points of the fees and the commission structure is whether you are an exclusive author or a non-exclusive author. If you are an exclusive author, you get a special badge on your profile and an increased commission rate.

It breaks down like this; Envato charges non-exclusive authors 55% of the item price. Keep in mind the item price is also made up of the buyer fee. So if you sold an item as a non-exclusive author on ThemeForest following this guide and the item cost $100, you'd receive just $36. A huge decrease in the actual amount of taken, working out to just 36% of the sale. One of the highest fees on any marketplace. Take into account as well that most items on ThemeForest aren't $100. Some of the most popular ones are just $39 on sale or around $60 at their full price.

If you are an exclusive author at Envato, the commission is on a sliding scale. The fee for exclusive authors is between 12.5% and 37.5% of the item price including the buyer's fee. If you were at the lowest end of that sliding scale which is based on the total amount of revenue you've taken on the Envato marketplace, on a $100 item, you'd receive just $50. Or exactly half which is a huge chunk of your income and can really impact on your bottom line. If you were at the highest end of that scale or paying just 12.5%, you'd get back $70 on a $100 item.

 

  • Support

As an author you aren't required to support your item. However, this is generally inadvisable and most buyers would expect support. After all, you wouldn't buy a brand new car and not expect the manufacturer to help if anything went wrong, would you? It's the same way with software. No one is going to buy your products if you don't offer support.

 

  • Refunds

A while back Envato handled the refunds for authors, now they don't. So you have to handle all refund requests yourself. While you can refer to the Envato refund policies by not granting refunds you risk bad reviews and reviews and stars are crucial on any marketplace. This leaves you feeling at the mercy of unreasonable buyers with no real way out. You also can't guarantee that the buyer isn't still using the product.

 

  • Traffic

One of the main perks of selling on Envato is the traffic it can bring to your product. Most people visit Envato with the intention of buying something meaning you have buyers looking at your plugin or theme ready to make a purchase. They also feel more confident in the purchase as it's backed by Envato and on this larger marketplace. Very similar to the mentality of why some prefer buying off Amazon than a small independent retailer even if it is that retailer they are still technically buying from.

 

Selling with Freemius

Freemius is an interesting proposition. It's primarily aimed at those who want to offer freemium plugins and themes. The point of freemium being someone downloads the free version from WordPress.org or your website, likes what they see and then decides to upgrade to premium.

Unlike Envato, Freemius is an SDK that you embed in your theme or plugin and they also have buy button functionality to allow someone to purchase directly on your website. More than Envato though, Freemius gives actionable insights and intel on what people are doing with your plugin and theme including prompts for feedback when they deactivate or delete. This allows you to collect feedback, plan features and get a better overall feel for what's happening with your plugin or theme.

 

  • Rules

Like with most websites and services there are terms and conditions, but overall there aren't any you can do this and can't do this like there is with Envato. As unlike Envato you aren't selling on Freemius websites you are just using their checkout technology to sell on your own website. This makes it simpler and easier to get started than with a platform like Envato.

 

  • Fees

Freemius has a much more palatable fee structure just 7% plus gateway fees. Meaning if you sold a $100 item with Freemius, you'd receive $89.70 which is the 7% fee plus the 3% gateway and 30 cent gateway fee. These fees are after you've taken $5,000 from the platform. Before that you pay 27% on the first $1k, 17% on $1k-$5k and then after that, you pay the 7% though enterprise pricing is also available.

 

  • Support

You're entirely responsible for any support required by people that use your plugin just like you are on Envato. Freemius support itself is great with them assisting you if you have any issues getting the Freemius SDK integrated into your plugin or theme.

 

  • Refunds

Freemius allows you to select from multiple different refund policies, the Freemius platform itself can process refunds for up to 30 days. After that if your customer requests a refund, you'd need to arrange that with the buyer. Because of this, Freemius calculates payouts to ensure you can always process refunds without it needing to connect directly to your PayPal or Bank account. You can read about this more in-depth here.

 

  • Traffic

Unlike Envato as Freemius is a hosted checkout, not a marketplace, there are no buyers being directed to your item or marketing efforts towards your plugin sales. Freemius is for selling on your own site, and as such, you'll need to try and get visitors to your site and then convert them into a paying customer. One way you can do this is by offering a free version on WordPress.org, and then those users can upgrade to Pro directly within their WordPress Admin using the Freemius checkout. The best part being the Freemius SDK is 100% compatible with WordPress.org.

 

The Verdict

If you are just starting out you have a big decision to make, you could go with Envato, Freemius or even your checkout system. Overall I'd personally go with Freemius, it offers lower fees, a better payout structure and handles the collection of EU Vat for you. Coupled with the built-in licensing system (which you don't get with Envato) and the ability to create a free version to upload to WordPress.org Freemius is the go-to solution.

Envato on the other hand still could be a good value proposition if you have a state of the art theme or a product you feel will do well. It will get eyeballs on your item even if you don't particularly get many sales it will get your name out there.

Jack Kitterhing is a WordPress developer from England. His love of WordPress began at age 11 when he set up his first blog. After a stint as WPMU DEV's Project and Quality Assurance Manager, he's now a Software Developer at Themeco.
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