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A ThemeForest through the Numbers - WordPress Theme Analysis
Envato's ThemeForest and CodeCanyon are de facto the premier market places for WordPress plug-ins and themes. We' ve all been told about the stunning track records of the Avada themes and the Visual Composer plug-in. These extraordinary tales are what encourage designers to join the boat, but is it really possible to make a profit off the sale of WordPress plugins/themes on CodeCanyon/ThemeForest?
Is it a WordPress plug-in, or a WordPress topic? The first contribution in this volume focuses solely on ThemeForest. In the past year alone, it reported a pre-tax gain of $33 million from the sale of a broad array of consumer products ranging from sound and sticky pictures to plug-ins and themes.
Who is ThemeForest? Envato's second English-language marketing platform, ThemeForest, was started in 2008 and concentrated on the sale of artwork and themes. Its first article was published on ThemeForest in August 2008. There was a WordPress topic called Our Community by a Malaysian free-lance programmer - Kai Loon. Today, ThemeForest is Envato's most profitable online marketing platform and one of the 300 most frequently viewed Web sites in the United States.
How large is the WordPress part within ThemeForest? Out of a totally of 28,644 WordPress themes and themes on ThemeForest, 7,986 (or 28%) are WordPress themes. ThemeForest has handled deals with a combined value of USD 355,617,997 since 2008. Of these, $286,355,625 are for WordPress topics only. ThémeForest earned 286 million U.S. dollar for WordPress Themes.
Whereas only 28% of the themes on ThemeForest are WordPress themes, the WordPress themes are 80. On the basis of ThemeForest's selling record and annual revenue per article, ThemeForest GVM (Gross Merchant Volume) will be $175,660,082 in 2017. The WordPress themes sell will be $138,600,378 of this cake. I sent this to my boyfriend Luca Fracassi for a rapid mental health check, and he immediately contacted me and said that this FER seemed strange, as ThemeForest's overall turnover with WordPress themes from 2010 to today was $286 million and I charged $138 million for a year.
I' re-validated my formula, which calculated the mean per article per month turnover today, and it was good. If there is no error in the formula, "new" means that either the Envato buyer's mean yearly spending on ThemeForest topics must rise dramatically, or there must be an increasing amount of consumer spending (number of buyers).
So, to give you the answers - WordPress is the most profitably priced website for ThemeForest. When WordPress disappears in the morning, ThemeForest will loose ~80% of its revenue. Is ThemeForest popular with developers? With regard to the stocktaking of WordPress topics, it is clear that ThemeForest is only becoming more and more popular.
I' ve listened to many influences in the WordPress eco-system praising the theme markets. But the numbers are speaking a different language - not only the "theme goldrush" is not over yet, it is becoming more and more dynamic. It is interesting to see that it took about 3 years until ThemeForest began to recognize its significant dynamics. It is also surprising to see that 2016 was a top year for ThemeForest.
2,532 new WordPress themes have been added to the plaza. This is a 46% increase in WordPress topics in one year! 2,532 new WordPress themes were added to ThemeForest in 2016. Could you develop a sustainable themed business on ThemeForest? Although this might seem a curious issue if you start by reading it first, as there are already a number of popular themed stores on ThemeForest, we don't often get to know the bug reports, and it is important to know how many achievements there are in comparison to mistakes.
It is also important to know that ThemeForest is already 8 years old and that the start of a WordPress themed store on ThemeForest today is very different from 2 or 4 years ago. Of the 8,000 WordPress topics, 19 traversed the $1 million turnover. If Envato calculates its fee at 30%, ThemeForest turns 14 thematic writers into millions.
ThemeForest WordPress generated revenues of $1 million with 19 of its 8,000 themes. By far Avada is the most popular WordPress topic on ThemeForest. On the basis of the sale story, the Avada boys collect about $220,000 a month every year - that's unbelievable! For the sake of understanding the size of the "whales", the Top 20 WordPress Themes are in charge of 13.
5 percent ($18,756,450) of the entire WordPress Themes revenue on ThemeForest. These numbers are all stunning, but if we look at them through a loupe, the numbers look very different to the remainder of the team. A WordPress topic on ThemeForest has an $50 median pricing.
63, while between $13 and $350 for the most costly one. Thirty-three percent of WordPress themes on ThemeForest cost $59 (the most beloved price). On ThemeForest, the most favorite WordPress topic is $59 (33% of all topics). Three percent of the themes are calculated at these 4 points.
Until recently, the Envato employees were in charge of the prices of the topics. I suspect that they did some analyses and found that these points generated the highest revenue (selling point X). What is the number of licences of your Wordprocessor topic you should be expecting to trade on ThemeForest?
Fifty-six percent of WordPress themes on ThemeForest purchased less than 100 licences from the date of publication. An overwhelming majority of the companies (6,940 / 86. 9% Themes) were selling less than 1,000 licences. Just 0.5% of WordPress topics sell more than 10,000 licences. Obviously, market place timing is important, so I have drawn some numbers to see how long on average it takes for these WordPress topics to arrive.
Then I wanted to see if and how much more market space would mean. Therefore, I recorded the monthly media revenue over the entire number of monthly listings of the topic on the market place. Don't immerse too deeply in the media definitions, but it's a good way to show the "average" turnover while eliminating the static from the calculation by disregarding both the extraordinarily successfull and the unusually poorly performing themes.
This means that you can anticipate relatively constant overall revenue in the first 6 years.
Mean revenue per year for a submission or topic on ThemeForest is only $6,132. When we look at the WordPress topics, the mean turnover for the year is 17,355 US dollars. How much is the life cycle value of an avarage WordPress themes on ThemeForest? On the basis of the WordPress topic revenue per year rate and the graph of media revenue over a period of 6 years on the markets, an issue will be generating $17,355 per year per year gross in the first 6 years.
On the basis of the average charts, it looks as if topic selling will gradually wane after 70 month, but as there were not enough points after that time ( only 215 topics), it is really difficult to forecast. Let us suppose that turnover is constant for 10 years. What would you think to make with a WordPress topic on ThemeForest?
Unless you are selling only on ThemeForest, the fee is 64%. When you decide to resell only on ThemeForest, the Rev stock is issued in stages. After 10 years on ThemeForest, you are therefore likely to achieve a net profit of 113,598 US dollars (before taxes). Wordprocessor themes exclusive to ThemeForest cost only $113,598.
Is ThemeForest able to receive the same amount of revenue per topic? Last year an annual number of 230 new WordPress topics were added to ThemeForest every year. This is an unbelievable 34.5% increase in the WordPress themes stock. Great news for shoppers because it means more diversity and more contest, but it' not good for writers because the market place is becoming full.
Envato's goal to achieve the same revenue per topic is to either grow its buyers' communities by 34. Or they would have to find a way to raise the yearly spending of an average purchaser by 34. Under the assumption that a member's avarage yearly spending on WordPress topics will remain the same, Envato will need to attract an extra 2,631,643 members to achieve the same revenue per topic.
Currently, the ThemeForest' GMV is 138,600,378 US dollars per year. This means that at today CMS membership sizes, an avarage member of the CMS will spend $18.17 per year on WordPress topics. Meaning that on an Envato site every third individual buys a WordPress topic every year - that's crazy!
That' s the theory, if all WordPress topic price would rise by 34. Perhaps this is one of the main reason why Envato has chosen to make price more competitive for writers. Unless there is a price shift, the mean yearly expenditure on WordPress topics must rise to $24.43, which means that on the average every second individual in the Envato data base must buy a topic in 2017.
On the basis of the historic facts and the above mentioned analyses, I would say that to list a new topic on ThemeForest today would only make any sense if you live in a development economy where $500-$1,000 is enough to cover the cost of your money. Opportunities to start a lucrative themed store on ThemeForest while you live in the USA or another West and make it your primary revenue stream are just not in your favour.
Just 5. 6% of the topics earned more than $3,000/mo. I didn't even consider the expenses for topic creation, designing and ongoing supervision. Just 5.6% of WordPress themes on ThemeForest earns more than $3,000 per months. As long as the topic developing fee is below $43,000 (which is definitely feasible), you could be generating a pretty 10% interest return for 10 years.
To maintain this inventory, known as the "WordPress theme," you are unfortunately the one who must work harder to keep it relevance to the industry and support your (hopefully) expanding customer list. Just how to start a successful WordPress plug-in company in the subscriptions industry. - We have just received your copy of'The WordPress Plugin Business Book' at ....Have a typo in your Email? Click here to change your e-mail and resend it.
What better way to resell WordPress themes? ThemeForest is a good place to test the water and see if your WordPress topic gets any kind of pull at all, without a headache, if you're just beginning to develop it. Also, it's a free verification of your coding done by expert users at ? (not that I encourage anyone to use it).
But if you want to set up a significant company, the chances of getting there with ThemeForest are slim. Which are the main advantages of the sale of your MindPress topic outside ThemeForest? ThermeForest will charge 30%-64% royalty (starting with at least 50% for the $3,000 initial) for the distribution and commercialization of your WorPress themes.
It also makes good business sense for the starting fee to be high, as the on-boarding of topic writers is more costly than the running cost (think of the codes reviews part - this will cost the business money). If you are selling yourself now, you are obviously gambling according to your own set of policies and do not have to buy a subscription for a special offer.
Although you can now fix your own pricing on ThemeForest, you are still in competition with 8,000 other themes in the plaza, making it difficult to calculate $100 for an article where the mean is $50. Conversely, when a visitor comes to your site, it's your merchandising side to "convince" the visitor of your $100 design, you don't compete with other designs in the same class, just a click away.
Currently ThemeForest is restricted to one-time payment for lifelong upgrades. A website's typical life cycle is about 3 years. If you are selling yourself, you can make your deal more lasting by establishing periodic payment and automated renewal. By selling your WordPress themes solely on ThemeForest, your sales are left to the grace of the market place economy.
Every minute alteration in the Google searching algorithms or changes in ThemeForest's performance in terms of SMS can and probably will influence your revenue per month. For example, in 2015, a group of top writers report a significant decline in turnover of 70%. If you are selling yourself, you can broaden your client base to reduce the risks of such a sharp decline in revenue.
Various canals that need to be considered include search engine optimization, search engine optimization, social trafficking, advertising, email advertising, WordPress. org, non-exclusive search engines, etc. ThermeForest thematic licences are restricted to a sole location. Because themes are bought mainly because of their layouts and designs, the likelihood that someone would buy the same themes twice is low.
We have many different types of businesses and opportunities to make a living with topics. ThermeForest is restricted to only one type of buisness - purchasers purchase the product once and receive 6 or 12 month lifelong maintenance and update. Alternate buisness paradigms could be: Distribute topics on WordPress.org and up-sell a paid edition.
One similar approximation is the free redistribution on WordPress.org with a free topic and free selling add-ons. Thus your topic becomes a plattform with a micro-ecosystem for plug-ins. Like Genesis and other popular themed stores. A further buisness paradigm that works well for some WordPress themed stores is membership.
It allows you to design a range of themes and yours to market your entire thematic library. ElegantThemes and ThemeIsle have thus established their shops and are experiencing a boom. Will you be able to set up a successful subscription-based WordPress Theme Business? You need to establish your own trademark, design a website and increase your website exposure.
Fortunately, you can prevent the scratch-free evolution of all problems with the eCommerce infrastructures that affect things like safe payment, subscription, licenses, automated updating and more. Figures include figures from the start of ThemeForest until 13 November 2016. As most revenue computations are made on a flat-rate 30% market fee and ignore the extra 30% for non-US vendors from non-US jurisdictions that have no US fiscal agreement, the revenue per article is even lower on avarage because not all software engineers sell solely on ThemeForest, and the fee starts at 50% and only drops to 30% after $74,000 of overall GDP.
However, not all author country have fiscal treaties with the US; we believe that some of the early successes of WordPress themes writers on the market had better conditions to get them to remain on the market. Therefore, the 30% mean fee is a fairly good indication. Because ThemeForest' s API does not allow you to drag and drop dates according to the date space, we have used the following calculation to calculate the mean quarterly revenue for each theme:
On ThemeForest there were 7 articles with insane prizes (some of them over a million dollars). And I think these topic writers tried to do some sort of experiment in selling and selling SEOs, to make their articles appear first in the results when they order the articles first on the highest priced basis.