Have you ever thought about how Wix makes its money in our quickly changing online world? Well, your curiosity is about to be rewarded. In our upcoming series, we're set to uncover the fascinating world of Wix's money-making strategies.
Together, we'll delve into the seven key methods that keep this digital giant thriving. We'll unlock the secrets of Premium Subscriptions, explore the bustling Wix App Market, delve into the lucrative business of selling Domain Name Registrations, and reveal the power of Ascend by Wix.
But that's not all, we'll also venture into the realm of Wix's Logo Maker, uncover the value in a Personalized Mailbox, and finally, we'll shine a light on Wix's other business solutions.
So, stay tuned. You'll discover how Wix turns websites into wealth, one feature at a time.
7 Ways: How Does Wix Make Money
At the heart of Wix's successful business strategy lies a monthly subscription model, which forms the foundation of its revenue generation. Beyond this, Wix expands its financial horizons through shared profits derived from third-party applications and mailbox services.
Furthermore, the company benefits from one-off fees, including logo creation and domain registrations. Completing its comprehensive income structure, Wix provides a specialized CRM tool for business clients, delivering yet another lucrative revenue stream.
Do you want to know what is Wix? We can help. We have written a guide that covers everything you need to know about Wix, from the basics to the advanced features. We even include a section that explains Wix in terms that a layperson can understand.
So what are you waiting for? Visit our guide today “what is Wix and What you should know about wix?” and learn everything you need to know about Wix.
1. Premium Subscriptions
Wix operates on a freemium model, offering a basic website builder for free but charging for premium features. The company primarily generates revenue through these premium subscriptions, offering several tiers with varied pricing.
Here's a brief breakdown of how Wix makes money from its premium plans:
- Premium Subscriptions: Wix offers a variety of premium plans, each with different benefits like increased storage and bandwidth, removal of Wix ads, the ability to connect a personal domain, Google Analytics integration, and more. These subscriptions constitute a significant portion of Wix's revenue.
- eCommerce Solutions: Wix provides solutions for online stores at additional costs, enabling users to accept online payments. Wix takes a small commission from each transaction, contributing to their revenue.
To gain a thorough understanding of our pricing plans and to compare Wix's pricing with other website builders, we encourage you to visit our blog post titled "How Much Is Wix: Pricing & Comparison." Clicking on the link will lead you to a comprehensive guide that explores these topics in detail.
- Additional Services: Wix provides other professional services, such as SEO optimization, business solutions, and logo design services, which users can purchase separately.
Revenue Report of Wix
These points are highlighted by the report published at CISION PR Newswire.
- The total revenue in the fourth quarter of 2022 was $355.0 million, marking a 6% year-over-year (y/y) increase.
- On a y/y constant currency basis, the total revenue was $361.4 million, up 8% y/y.
- Revenue from Creative Subscriptions in the fourth quarter of 2022 stood at $265.3 million, an 8% increase y/y.
- The Annual Recurring Revenue (ARR) for Creative Subscriptions increased to $1.08 billion, up 7% y/y.
- The revenue from Business Solutions in the fourth quarter of 2022 was $89.8 million, showing a 3% y/y increase.
- Transaction revenue was $38.9 million, up 8% y/y.
- Partners' revenue in the fourth quarter of 2022 was $94.6 million, a 23% increase y/y.
- Total bookings in the fourth quarter of 2022 were $371.8 million, up 6% y/y.
- On a y/y constant currency basis, total bookings were $385.8 million, up 10% y/y.
- Bookings from Creative Subscriptions in the fourth quarter of 2022 were $281.8 million, up 7% y/y.
- Bookings from Business Solutions in the fourth quarter of 2022 were $90.0 million, up 3% y/y.
- The total gross margin on a GAAP basis in the fourth quarter of 2022 was 64%.
- The gross margin for Creative Subscriptions on a GAAP basis was 78%.
- The gross margin for Business Solutions on a GAAP basis was 22%.
- The total non-GAAP gross margin in the fourth quarter of 2022 was 65%.
- The gross margin for Creative Subscriptions on a non-GAAP basis was 79%.
- The gross margin for Business Solutions on a non-GAAP basis was 24%.
- GAAP net loss in the fourth quarter of 2022 was $(39.0) million, or $(0.67) per share.
- Non-GAAP net income in the fourth quarter of 2022 was $35.6 million, or $0.61 per share.
- Net cash provided by operating activities for the fourth quarter of 2022 was $53.2 million, while capital expenditures totaled $14.6 million, resulting in a free cash flow of $38.6 million.
- Excluding the capex investment associated with the new headquarters office build-out, free cash flow for the fourth quarter of 2022 would have been $52.0 million.
- Under the Board-authorized $300 million share repurchase program, the company executed $243 million in repurchases of ordinary shares, which was approximately 5% of the total shares outstanding.
2. Wix App Market
The Wix App Market is a collection of powerful web apps, services, and plugins that make it easy to grow your business or brand online. These apps provide additional functionality and features not included in the base Wix website builder.
The revenue generated from the Wix App Market can be attributed to the following:
- Paid Apps: While some apps are free, many offer premium features or services that come at a cost. This includes apps for additional design features, SEO tools, e-commerce plugins, and marketing tools. When users purchase these premium apps, a portion of that revenue goes to Wix.
- Commissions: Some apps operate on a commission basis. For instance, certain e-commerce or booking apps may take a percentage of sales or bookings made through the app.
- App Developers: Wix also allows third-party developers to create and sell apps on their platform. In these cases, Wix often takes a percentage of the sales as a fee for hosting the app on their platform.
Report on Revenue Generated Wix by Wix App Market
The report by Markets. business insider shows that store owners and fitness businesses experience significant increases in transactions and services booked using native mobile apps, emphasizing their growing importance in customer acquisition, brand loyalty building, and revenue generation.
Wix's new product, Branded App, allows users to design their native mobile apps with complete creative control, from customizing the icon to the content layout.
The app builder caters to a range of businesses, seamlessly integrating features from existing Wix sites. Both the app and site activities are synchronized with the Wix dashboard, providing a cohesive user experience.
3. Selling Domain Name Registrations
Wix does generate revenue from selling domain names.
Let's now assess the cost of purchasing a domain that suits our requirements. Simply type in the desired domain name and hit the 'search' button. This action will present you with a variety of available domain options.
You can select any of them based on your preferences and needs. To finalize the purchase, click on 'continue.' This process is how we make payments to Wix, enabling them to generate revenue from the sale of domain names.
When a user signs up for a premium plan with Wix, one of the perks is the ability to connect a custom domain to their website. Users can choose to purchase their domain directly from Wix, which streamlines the process and keeps everything under one account. Wix offers a wide variety of domain extensions (.com, .org, .net, etc.) that users can choose from.
The cost of the domain is typically billed annually, providing a steady stream of revenue for Wix. Please note that while the domain is free for the first year under most of Wix's premium plans, users must pay a renewal fee for each subsequent year. This is an important part of Wix's business model and contributes to its overall revenue.
Please keep in mind that the specifics of Wix's domain selling service and its contribution to its overall revenue can vary, and the most accurate information can be found on Wix's official site or its financial statements.
Report on Revenue Generated Wix by Wix Selling Domain Names
The report by Markets business insider highlights that Wix employs a key metric known as Creative Subscriptions Annualized Recurring Revenue (ARR), which is determined by multiplying the Creative Subscriptions Monthly Recurring Revenue (MRR) by 12.
MRR constitutes three parts: monthly earnings from all active Creative Subscriptions at the period's end, excluding domain registrations, average monthly income from domain registrations active at the end of the period, and revenue from various partnership agreements and enterprise partners on a monthly basis.
The data about Wix's revenue from domain name sales is embodied in point (ii) — it includes the average monthly revenue from domain registrations active at the close of the period. However, this excerpt does not provide specific numerical values.
4. Ascend by Wix
The pricing for Wix Ascend varies depending on your service level. The platform offers a free option, along with three paid plans priced at $10, $24, and $49 per month.
If you opt for a paid plan, the annual cost of supplementing your regular Wix subscription with Wix Ascend is as follows:
- The Basic plan is priced at $120 per year.
- The Professional plan costs $288 annually.
- The Unlimited plan comes in at $588 for the year.
These prices give you access to enhanced features and services to help grow your business or brand online. Please note that these costs are in addition to your regular Wix account subscription.
Ascend PlanYearly CostBasic$120Professional$288Unlimited$588
5. Logo Maker
You can create a logo by visiting this URL at Wix Logo Maker and then clicking on Create Your Logo.
At this stage, you'll be prompted to choose between creating a logo yourself or hiring a professional designer.
If you decide to 'Create Logo' yourself, Wix does not charge any fees, enabling you to design your logo free of cost. However, should you choose to 'Hire a Designer,' Wix will charge for this professional service, thus generating revenue. Upon choosing this option, you will be prompted to submit your contact information by clicking the 'Submit' button.
Logo Design Budget Range:
- Under $100 (Logo Maker): This option utilizes AI technology to generate a basic design. It uses a selection of stock icons and fonts to create a logo. It's suitable for budget-conscious businesses, solopreneurs, and creators who need a logo quickly and cost-effectively.
- $300-$800 (Freelance Designer): This range typically involves working with new designers seeking to broaden their portfolios. They may have limited experience but offer more personalized service than automated systems. This is a suitable option for small businesses or individuals with a good understanding of the design process and some time to invest in it.
- $800-$2,500 (Experienced Designer): This budget allows for hiring more experienced designers. These professionals provide higher-level designs due to their extensive expertise. This option is fitting for businesses that are familiar with the design process and that have the necessary time and budget to invest.
- $2,500 and above (Professional Design Agency): This price point involves working with a professional design agency that can deliver top-tier designs. These agencies often have dedicated teams working on the project, ensuring a comprehensive approach. This option is most suitable for businesses with substantial budgets seeking a full-scale branding package, including but not limited to logo design.
6. Personalized Mailbox
Wix does generate revenue from providing business or personalized email services.
Wix offers a professional email service through G Suite by Google Cloud. This service allows users to get a custom email address (like yourname@yourbusiness.com), among other features. It's available as a separate subscription and is not included in Wix's regular website subscription plans.
Now I try to buy personalized email for my business from Wix. For this purpose I visited this URL https://www.wix.com/business/email-address.
Then it told me to login with the email and password.
WIth my premium website url’s Wix gave me the choice to make business emails. Then I clicked on Let’s Start button.
Then I wrote the user name as my own choice and then will give me this price for my personalized email. It shows that Wix generates revenue from Personalized Mailbox.
7. Other Business Solution Revenues
- E-commerce Solutions: Wix offers an eCommerce platform that allows users to create online stores. They provide features such as product pages, inventory management, shopping carts, and payment gateways. Wix earns from this through premium eCommerce plans.
- Wix Payments: Wix has a payment gateway for eCommerce sites. They charge a transaction fee for each sale made through this service, creating another source of revenue.
- Third-Party App Integrations: Wix collaborates with numerous third-party services (like marketing tools, analytic tools, etc.) which offer premium features at an additional cost. Wix likely receives a share of this revenue.
- Advertising: Wix may also earn revenue from ads displayed on free websites. Users have to upgrade to a premium subscription to remove these ads.
- Professional Services: Wix offers professional services such as SEO Wiz for search engine optimization, social media logo files, and reseller programs, which are priced separately and contribute to their revenue.
- Wix's Partnership Program: Wix partners with web designers and agencies, hosting providers, online marketplaces, and others, which likely brings additional income.
Wrapping Up
Wix generates revenue through several key strategies. Their primary source of income stems from premium subscriptions, which provide users with advanced features, including increased storage, bandwidth, and the ability to connect a personal domain. In Q4 of 2022, the revenue from these subscriptions amounted to $265.3 million.
Wix's eCommerce solutions, which allow users to accept online payments, form another revenue stream, with the platform charging a commission per transaction.
Additionally, at an extra cost, Wix provides various professional services, such as SEO optimization and logo design services.
Another significant income area for Wix is their App Market, where they profit from selling premium apps, commissions from certain apps, and hosting third-party apps on their platform.
Wix also profits from selling domain names, a service integrated into its platform that allows users to personalize their website addresses.
Wix Ascend, an all-in-one business solution, provides an additional revenue stream with its tiered subscription plans.
Furthermore, the Wix Logo Maker service contributes to Wix's income when users opt for professional design assistance.
Thus, Wix employs a multifaceted approach to revenue generation, leveraging its various services and platforms to maintain a diverse and steady income flow.
Frequently Asked Questions
1. How does Wix's business model facilitate its growth and success?
Wix's business model is primarily based on a freemium model, offering a basic website builder for free but charging for premium features. This model allows Wix to attract a large user base and then convert some of these users into paying customers. Additionally, Wix generates revenue through various other channels, such as the Wix App Market, domain name registrations, and business solutions, which contribute to its growth and success.
2. What are the main ways Wix makes money from its platform?
Wix makes money from its platform through several key methods:
- Premium subscriptions: Users can upgrade to paid plans for additional features and benefits.
- Wix App Market: Wix earns revenue from paid apps, commissions, and hosting fees for third-party apps.
- Domain name registrations: Wix sells domain names directly to users, generating revenue from initial purchases and annual renewals.
- Business solutions: Wix offers various business tools, such as Ascend by Wix, which provide additional revenue streams.
- Other services: Wix generates income from its Logo Maker (when users opt for professional design assistance), personalized mailboxes, and other professional services like SEO optimization.
3. What website revenue streams are available to Wix users?
Wix users can monetize their websites through several revenue streams:
- eCommerce: Users can create online stores and sell products directly from their Wix sites.
- Advertising: Website owners can display ads on their sites to generate income.
- Subscriptions: Users can offer premium content or services through subscription-based models.
- Bookings and appointments: Wix users can use booking and appointment apps to monetize their services.
- Affiliate marketing: Website owners can earn commissions by promoting other products or services.
4. How to monetize a blog and make money on Wix?
You can monetize a blog and make money on Wix. Some ways to do this include:
- Advertising: Display ads on your blog to generate revenue from clicks or impressions.
- Affiliate marketing: Promote products or services in your blog content and earn commissions on sales.
- Sponsored content: Partner with brands to create sponsored blog posts or product reviews.
- Digital products: Sell ebooks, courses, or other digital products related to your blog's niche.
- Coaching or consulting: Offer your expertise through one-on-one coaching or consulting services.
5. Does using Wix for website creation cost money?
While Wix does offer a free plan for website creation, certain features and benefits are only available through paid premium plans. The cost of using Wix depends on the specific plan and features you require. Premium plans start at a few dollars per month and can go up to a few hundred dollars per month for enterprise-level solutions. However, the basic website creation tools are available for free.
