Details about the tutor platform fee changes going into effect January 15, 2019
A lot has changed since we started Wyzant in 2005, including the growth in subject matter taught by tutors, the rise of online tutoring, and the world around us in which education is even more critical. One area of Wyzant that has not changed in our 13 years is the tutor fee for the use of the platform. We recently made the decision to move away from the current graduated 40% - 20% platform fee percentage scale to a flat 25% platform fee, taking effect January 15. This blog post elaborates on the changes and reasoning behind them.
Overall, the new platform fee structure will immediately benefit the majority of tutors. However, I recognize it is a significant change, especially for tutors who are at or near the 20% fee percentage. Long-term, my expectation is that you will all benefit by being part of a bigger, stronger marketplace with greater opportunities to build your business and help more students.
What is happening?
Beginning on January 15, 2019 at 10:00 am Central Time all tutors will move to a flat 25% platform fee, meaning 75% of your submitted hourly rate will be distributed to you. Please see below for how this will impact you based on your current platform fee:
- If your current platform fee percentage is 40%, 35%, or 30%: The new 25% fee percentage will apply to lessons with all students, old and new, beginning for lessons that are submitted on or after January 15, 2019 at 10:00 am Central Time.
- If your current platform fee percentage is 25%: Nothing will change when the new flat fee goes into effect, unless you cross the 400-hour lesson threshold before January 15, 2019 at 10:00 am Central Time. If this occurs you will fall into the 20% platform fee percentage described below.
If your current platform fee percentage is 20%: Your fee will remain unchanged for students* with whom you have had lessons before January 15, 2019 at 10:00 am Central Time, for a “grandfathering” period ending July 1, 2019 at 10:00 am Central Time. After that, the flat 25% fee percentage will apply to lessons submitted for all students, old and new.
*For students to be included in the grandfathering period, you must have submitted at least one lesson with them before January 15, 2019 at 10:00 am Central Time.
- Our referral program will remain unchanged, meaning you will receive 100% of your posted hourly rate for lessons, and all other tutor and student payment policies, including the student service fee, remain the same.
Not sure what your current platform fee percentage is? Check our the % listed in the “Pay” column on your Lessons page to find out!
Why are these changes being made?
The major reason for this change is feedback we’ve received directly from tutors listed on Wyzant, along with data we’ve analyzed that shows how hard it is for newer tutors to break through in the marketplace. Many of these tutors are extremely qualified but despite taking all the right steps, they’re struggling to gain traction for their business. A big reason for this is that they haven’t had a chance to establish many ratings and reviews and therefore don’t appear credible to prospective students.
The best way for new tutors to get those first few students in order to build up their credibility and gain traction is to offer a competitive price, but that’s difficult to do when they are paying a platform fee to Wyzant (40%) that’s twice what fully established tutors are paying.
Having a healthy supply of new tutors is an important factor in the ability to grow the Wyzant marketplace, which is ultimately beneficial for all tutors. In addition, in today’s educational environment, the in-demand skills and subject areas are constantly evolving. In particular, we’re seeing strong interest in advanced academic subjects for higher ed as well as career-oriented and technical subject areas. Therefore, it’s important that we give new tutors listed on the platform a way to get traction in order to make sure we have the appropriate coverage in these areas.
Despite the change in platform fee, tutors with a long track record of success using Wyzant’s platform still have a competitive advantage, since all those lesson hours are one of the most differentiating features a tutor listed on Wyzant can have. As you can see in the diagram below, the data shows that tutors with more hours tend to receive more tutoring opportunities. We expect this will continue to be the case.
One of the most unique and important aspects of Wyzant is our commitment to tutors having the capabilities needed to control their businesses. We believe in creating an open marketplace built on transparency, a strong financial value proposition, and a level playing field where hard work and performance determines a tutor’s success. Furthermore, Wyzant’s overall mission is to enable more people to teach and learn from one another. We feel that this pricing change is better aligned to these principles. Our commitment to providing tutors with enhanced capabilities to control their business, as well as overwhelming tutor demand, are the reasons we’re introducing the capability for tutors to maintain separate hourly rates for in-person and online tutoring, starting December 12, 2018.
A lot went into this decision. We looked at volumes of data and spoke to a number of tutors. We also did a lot of competitive research, which showed that Wyzant continues to be the best deal for tutors, by far. But it wasn’t an easy decision. The thought of negatively impacting the most active, committed tutors was hard to swallow for the team at Wyzant tasked with evaluating our options. Ultimately, I made this decision, because I truly believe it’s best for the long-term growth of the marketplace, which will benefit all tutors listed on Wyzant.
Finally, let me clarify that overall, the new pricing is not an increase in Wyzant’s “take rate.” In fact, the new flat rate is less favorable to Wyzant than the current pricing model has been in recent years. This change does, however, make our revenue more stable and predictable, which matters because it allows us to both improve the product as well as invest in marketing to drive more students to the platform.
What can I do to take advantage of the new flat rate?
Remember, as part of our commitment to provide you with the capabilities to control your tutoring business, you can change your hourly rate at any time by visiting your Rates and Policies page.
For newer tutors who want to build their business faster, lowering your hourly rate temporarily can help, and hopefully this new pay structure enables you do so while still making a good wage.
In short, you need to do everything in your power to a) build more tutoring hours in order to drive more leads, and b) deliver a wonderful tutoring experience to your first few students so that you can earn positive ratings and reviews for your profile and good conversion and retention metrics. (Learn more about why this matters in this blog post.)
For tutors who are currently at the 20% level, you may want to consider increasing your hourly rate to offset the 5% fee increase for new students beginning January 15, 2019. Once you have a strong history of performance on Wyzant and a good number of positive ratings and reviews, a few dollars difference in hourly rate shouldn’t affect your ability to attract new students.
For tutors currently in the 30-35% platform fee range, you can choose to either enjoy the extra earnings, or if you’re trying to add more students, consider reducing your hourly rate, especially if you don’t have much recent history or many ratings and reviews.
Tangentially related to this pricing change but critically important is that you embrace online tutoring. The vast majority of new students are now taking lessons online, and this trend will continue in 2019. Online is a great way for tutors to scale their business by accessing a national pool of students and eliminating travel time and costs. Additionally, the Wyzant Online Learning Tool is best-in-class, with a plethora of features to create a rich, interactive learning experience.
Looking for more? Visit this page for more tips on how to grow your business.