This is an update to a post titled “The Paid Memberships Pro Business Model. Copy It!”, originally published on the PMPro blog. Since then, our own business model has changed, but the model outlined below is what took us from $0 to $250,000 in plugin sales on top of a similar amount from consulting, which was largely based around those same plugins.

Here is a checklist explaining how to make money with your free WordPress plugins. We used this very model to make over $250,000 in recurring revenue selling plans around Paid Memberships Pro. Today, with just incremental changes to this plan (using our own license server, building a custom support platform, raising our prices, and a lot of marketing work) the Paid Memberships Pro business brings in over $1,800,000 in revenue every year and growing.

A relatively modest plugin with 10,000 users could have as many as 1000 paying customers, which at $100 per year per customer is $100,000 per year. That’s very good money and very feasible for even niche plugins. That’s enough money to base a healthy career around. This kind of money may be available to you, but you’re holding off on doing something about it because you think it’s going to take more work or a more complicated business setup than you expect. Before you give up on this dream, read try implementing the steps below and see how it goes.

The Checklist

  1. Use the GPL license. 100%.
  2. Have just 1 version of your plugin. No free vs pro. No paid modules or extensions.
  3. If you feel you must have extensions, use the 80/20 rule to separate certain features which are only useful for 20% of users, but confusing for the other 80%. Put the 20% features into free extensions or “add ons”.
  4. Put all of your plugin code up on GitHub.com. Encourage other developers to get involved.
  5. Put all of your plugin code in the WordPress repository.
  6. Have the download link on your website require a free membership (created with Paid Memberships Pro), and then redirect users to the zip file in the WordPress repository.
  7. Add documentation to the plugin website. Use the same domain. Start small and build it out as support requests are handled.
  8. Require the same free level to access the documentation on your site.
  9. Use the Limit Post Views add on for PMPro so visitors to your site can view 1-3 articles before being prompted to sign up. This helps with SEO as well.
  10. Add a premium support forum using bbPress and the bbPress Add On for PMPro. Require a paid plan for one year of access. We found annual recurring plans to work best. Charge enough to cover your average support costs per paying member, plus some.
  11. Set up a “do it for me” plan where you would install the plugin for users and offer up to 5 hours of customization or consulting. Charge a one time fee equal to what you would charge for 5 hours of consulting. It should be about 5-10x the cost of regular support. This plan was crucial in the early days, allowing us to work closely with customers, gaining valuable insights that helped us to improve the core plugin and add ons.
  12. Address all bugs and pre-sales questions on the WordPress.org forums. Direct other support to the paid membership on your site.
  13. Integrate with Omnisend or another email marketing service to automatically create a mailing list of your free and paid members.
  14. Focus your consulting business on doing more projects related to your plugin.

At 14 steps, this isn’t completely easy. It’s work. Here are the pros and cons as I see it:

Pros

  • You will save time by avoiding multiple versions of your plugin.
  • Using the WordPress repository for distribution saves you a headache.
  • Having all of your code open source and available for free will encourage use of your plugin to spread and will encourage other developers to get involved.
  • You are no longer supporting your plugin for free or for tiny donations. Set support prices so they make sense for your hourly rate, etc.
  • You are generating a potentially valuable mailing list from your otherwise idle plugin code.
  • Focusing your consulting business will allow you to raise your rates or increase your margins.

Cons

  • Your plugin will be labeled as the “free” option. People associate “free” with “worse” even if it’s not true.
  • People with no ability or intention to pay you (i.e. not customers) will use your plugin and demand support. You need to learn how to deal with them gently without wasting your time.

What’s Next

Who knows. There are many paths depending on your goals. I’ll try to share more on the specific challenges we faced, decisions we’ve made, and the successes (and failures!) we’ve had.

If you give the above a try, please please let me know how it goes. Let me know what challenges you are facing. If they are challenges we’ve run into as well, I might have something useful to say about it.