wix-business-model

How Does Wix Make Money? The Wix Business Model In A Nutshell

Wix is an Israeli provider of cloud-based web development services and is perhaps best known for its drag-and-drop website builder. Founded in 2006, the vision was to empower anyone to build their own site without coding, thus creating a drag-and-drop solution. Wix operates on a freemium model to attract customers to its platform, where those are prompted to enroll in one of its subscription plans.

Origin Story

Wix is an Israeli provider of cloud-based web development services and is perhaps best known for its drag-and-drop website builder.

The company was founded by Avishai Abrahami, Nadav Abrahami, and Giora Kaplan in Tel Aviv in 2006. The trio got the idea for Wix after trying to build a website for an unrelated business idea.

They noted that the process was costly, complex, time-consuming, and ultimately impossible for many consumers.

From there, a vision to empower anyone to create a website without coding or design skills was born.

Wix was a flash-based website builder initially, launching to beta users in 2007 and then globally the following year. By August 2013, the platform had already signed up 34 million users.

Today, Wix provides a high-quality platform to over 200 million users worldwide. These users are mostly entrepreneurs, designers, photographers, musicians, and restauranteurs.

Wix revenue generation

Wix operates on a freemium model to attract customers to its platform.

However, much greater functionality can be accessed by upgrading to a paid subscription plan.

Extra features include more storage and bandwidth and the ability to remove Wix advertisements and connect to a private domain.

Following is a look at the four paid options for individuals:

  1. Combo ($10/month) – for private users desiring a simple solution.
  2. Unlimited ($14/month) – for entrepreneurs and freelancers.
  3. Pro ($19/month) – for small business owners who want a complete online branding package.
  4. VIP ($27/month) – a combination of the above three plans with priority customer support and 35GB storage space.

There are also three business plans:

  1. Business Basic ($18/month) – for businesses that only need a system to accept online payments.
  2. Business Unlimited ($28/month) – with tools to grow sales such as social channels and marketplace selling.
  3. Business VIP ($38/month) – offering a full suite of products for a complete business solution.

Ascend by Wix

Ascend by Wix is a customer relationship management (CRM) tool allowing businesses to better connect with their target audience. Primarily this is an email marketing system with automations and advanced strategies.

Here, there are also three plans to choose from:

  1. Ascend Basic ($10/month).
  2. Ascend Professional ($24/month).
  3. Ascend Unlimited ($49/month).

Logo maker

Wix also offers professional logo creation tools for websites, social media, and merchandise.

While users can create a logo for free, they will need to pay a one-time fee to download it. The fee for a basic logo is $20. But to access extras such as social media logos, favicons, and watermarks, the fee is $50.

Wix App Market

The Wix App Market allows users to select from over 250 web apps to integrate with their site.

These apps encompass a plethora of topics, including email marketing, push notifications, drop shipping, event promotion, and interactive video creation.

While many of the apps are free, Wix takes a cut of all premium app purchases between its users and third-party app developers.

Key takeaways:

  • Wix is an Israeli web development service provider. It was founded in 2013 by Avishai Abrahami, Nadav Abrahami, and Giora Kaplan after the trio experienced difficulty in building a website for an unrelated start-up.
  • Wix operates on a freemium model. But for increased functionality, individuals and businesses can sign up for one of six paid plans.
  • Wix also offers a customer relationship management tool called Ascend by Wix and a premium logo creation tool. Lastly, the company likely takes a percentage of each premium app sale on the Wix App Market.

Read Next: How Does Shopify Make Money How Does WordPress Make Money How Does Squarespace Make Money How Does HubSpot Make Money.

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Related Business Model Types

Platform Business Model

platform-business-models
A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.

Marketplace Business Model

marketplace-business-models
A marketplace is a platform where buyers and sellers interact and transact. The platform acts as a marketplace that will generate revenues in fees from one or all the parties involved in the transaction. Usually, marketplaces can be classified in several ways, like those selling services vs. products or those connecting buyers and sellers at B2B, B2C, or C2C level. And those marketplaces connecting two core players, or more.

Network Effects

network-effects
A network effect is a phenomenon in which as more people or users join a platform, the more the value of the service offered by the platform improves for those joining afterward.

Asymmetric Business Models

asymmetric-business-models
In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.

Attention Merchant Business Model

attention-business-models-compared
In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.

Wholesale Business Model

wholesale-business-model
The wholesale model is a selling model where wholesalers sell their products in bulk to a retailer at a discounted price. The retailer then on-sells the products to consumers at a higher price. In the wholesale model, a wholesaler sells products in bulk to retail outlets for onward sale. Occasionally, the wholesaler sells direct to the consumer, with supermarket giant Costco the most obvious example.

Retail Business Model

retail-business-model
A retail business model follows a direct-to-consumer approach, also called B2C, where the company sells directly to final customers a processed/finished product. This implies a business model that is mostly local-based, it carries higher margins, but also higher costs and distribution risks.

B2B2C

b2b2c-business-model
A B2B2C is a particular kind of business model where a company, rather than accessing the consumer market directly, it does that via another business. Yet the final consumers will recognize the brand or the service provided by the B2B2C. The company offering the service might gain direct access to consumers over time.

Crowdsourcing Business Model

crowdsourcing
The term “crowdsourcing” was first coined by Wired Magazine editor Jeff Howe in a 2006 article titled Rise of Crowdsourcing. Though the practice has existed in some form or another for centuries, it rose to prominence when eCommerce, social media, and smartphone culture began to emerge. Crowdsourcing is the act of obtaining knowledge, goods, services, or opinions from a group of people. These people submit information via social media, smartphone apps, or dedicated crowdsourcing platforms.

Open-Core Business Model

open-core
While the term has been coined by Andrew Lampitt, open-core is an evolution of open-source. Where a core part of the software/platform is offered for free, while on top of it are built premium features or add-ons, which get monetized by the corporation who developed the software/platform. An example of the GitLab open core model, where the hosted service is free and open, while the software is closed.

Open Source vs. Freemium

open-source-business-model
Open source is licensed and usually developed and maintained by a community of independent developers. While the freemium is developed in-house. Thus the freemium give the company that developed it, full control over its distribution. In an open-source model, the for-profit company has to distribute its premium version per its open-source licensing model.

Freemium Business Model

freemium-business-model
The freemium – unless the whole organization is aligned around it – is a growth strategy rather than a business model. A free service is provided to a majority of users, while a small percentage of those users convert into paying customers through the sales funnel. Free users will help spread the brand through word of mouth.

Freeterprise Business Model

freeterprise-business-model
A freeterprise is a combination of free and enterprise where free professional accounts are driven into the funnel through the free product. As the opportunity is identified the company assigns the free account to a salesperson within the organization (inside sales or fields sales) to convert that into a B2B/enterprise account.

Franchising Business Model

franchained-business-model
In a franchained business model (a short-term chain, long-term franchise) model, the company deliberately launched its operations by keeping tight ownership on the main assets, while those are established, thus choosing a chain model. Once operations are running and established, the company divests its ownership and opts instead for a franchising model.

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