Pricing is one of the most important traits of any product. To this end, WordPress theme cost should be a crucial sales factor. Yet, looking at the state of the WordPress market today, there’s a bewildering array of different approaches to pricing models.
WordPress theme pricing (April 2017)
Where do we stand with WordPress theme prices today? Long story short, I made a list of as many WordPress themes as I could find, put them into a big spreadsheet, and did the sums.
As it turns out, the majority of WordPress themes for sale right now are priced either exactly at, or around, $59, with a few outliers in either direction.
This is a fairly consistent historical trend, too: prices have risen, but essentially only just above the rate of inflation (the average price of a theme in 2013 was $46). The market seems to have come to a consensus about what the average WordPress theme cost should be.
The economics of selling WordPress themes
What are the factors that might influence the pricing of themes, in the abstract sense? On the supply side, we’re chiefly talking about two factors:
- Barriers to entry: how easy is it for new themes to make it onto the market?
- Economies of scale: creating and selling more lowers costs, increasing profits.
The demand side is a little more tricky: Who wants themes?, What is it about them they want?, How much value do they ascribe to them?
What makes the market for themes interesting is that, like any digital goods market, distribution costs are fixed and thus the vast majority of costs involved are labor costs. WordPress themes are made on a computer, not in a factory, and so the “value” might appear to be based solely on market forces.
We might therefore reasonably expect the price to fluctuate freely, reflecting the market conditions surrounding competing products and development costs. Furthermore, you’d expect a huge comparative advantage (and thus market dominance) from companies able to keep labor costs low either because they’re based in or outsource to countries where wages are low versus the most developed economies.
Average WordPress theme cost in marketplaces
ThemeForest is one of the few marketplaces that makes sales data public, providing a rare opportunity to plot theme price against sales.
Does the WordPress theme cost have a significant impact on sales? Well, yes and no:
(Charts by Visualizer Lite.)
But what about the outliers?
This suggests low price is not in itself a particular selling point.
Before we draw conclusions, let’s also look at the theme club model and consider the current state of the theme club market.
What about theme clubs / theme subscriptions?
Analysis of theme club subscriptions show much more diversity in pricing, ranging from just $48 a year for Elmastudio’s selection of 23 themes, to $399 a year for 55 of WooThemes’s offerings.
The average price was $145 for a year’s subscription , with a median of $139. Clubs offering “lifetime” subscriptions (with no annual fee) have a mean price of $255, and a median of $249.
Theme club subscriptions do, of course, differ in how many themes they’re offering you for that subscription, so perhaps “yearly price per theme” is a better measure. Here we find some pretty substantial differentiation:
- the median price per theme is just over $4.20/year (which is an incredible deal),
- the lowest price per theme is $0.79 and highest is $27.18.
Is the market less sure about WordPress theme cost under a theme club subscription model?
Clearly there are a lot of variables at play here, but there are certainly some useful conclusions which we can draw. Let’s have a look at these in more detail next:
Behind the numbers
This data raises several important questions, although they are too interlinked to be answered separately:
- Why do so many single themes cluster around a single price point?
- How do themes succeed/fail at different price points, where one might expect their prices to have a bearing on their success?
- Is the current state of the market good for consumers and/or creators?
Important to understanding what’s going on here is the concept of the commoditized market. This is a situation whereby goods are treated by consumers as just that: goods, with creators pushing out products that are mostly similar, without any substantial difference in price or quality.
For example, gasoline – prices are mostly the same wherever you buy it, and few people save for enthusiasts have a particular brand loyalty to certain types; gas is gas. To consumers, themes are themes.
Commoditized themes market: good for consumers…
It may well be accurate to say that the middle-range of WordPress themes has reached the state of a commoditized market. It’s hard to say whether this is a good thing; on the one hand, consumers are able to get a relatively high-quality product at a fairly reasonable price, and the sales figures certainly suggest that developers targeting this price point stand to do well.
We can also see that the best-selling themes come from a wide spectrum of developers, which suggests that this clustering around a single price point is preventing market monopolization, which is good for consumers and developers alike.
But is this average price the “best price”? The concept of “perfect competition” relies on all parties having “perfect knowledge,” but in reality we’re far from this state. Experience shows that the majority of consumers will have little knowledge of what makes a theme good, except for what it says on the tin vs. the expectations that the consumer has.
Themes are not in any sense all equal.
This means that lower-quality themes, with respectable-looking marketing, can easily compete with much higher-quality ones simply by targeting the same price point. For developers with limited resources, there is only so much competition of this kind that is possible before it becomes economically unsustainable.
On the flip side, if the average price rises without a noticeable uptick in quality then consumers have, in general, less cause to choose WordPress over proprietary websites, as its cheapness and ease of use is one of its main draws.
Should all themes be priced the same?
The data clearly shows that the average best-selling WordPress theme cost is very close to the aforementioned price point of $59.
Away from that average price, however, there’s little correlation between price and sales. From this, it may make sense for theme vendors to focus on quantity of sales and price exactly at the golden $59 price point.
Perfect competition will support as many theme shops as are willing to enter the market – theoretically a much higher number than we see currently. Equally, in the coming years, if a small number of theme shops are able to gain a competitive advantage either in economies of scale, quality or branding, we could see the market move towards monopoly or oligopoly where it does become significantly more difficult for all but the biggest firms to compete.
If the “average” WordPress theme cost is $59 and such themes are in a very competitive state, what about other themes? How are they supposed to stand out? This is where we have to ask the question: why do expensive themes sell just as well as cheap themes?
Maybe it’s because higher prices generally help themes stand out from the commodified crowd – a high price appears to be both an advertising tactic and a selling point in and of itself. The data shows more expensive themes sell just as many as the less-expensive ones.
Indeed, with niche consumers clearly willing to pay a significantly higher price for the value added by niche themes, there’s plenty of space for niche theme sellers to get by perfectly comfortably focusing on these markets. Higher prices might lead to fewer customers, but with development time fixed and support costs marginal it will be much more profitable to have fewer customers at a higher price. The data suggests both consumers and makers of niche themes can be very happy with this arrangement.
Finally, what about theme clubs? With theme clubs seeing a much higher diversity of pricing, it seems unclear what the future of this market is. Indeed, with some clubs offering a mix of general themes and others offering niche themes, there’s a sound argument to be made that only a handful of clubs are directly competing with each other.
This current scenario is okay for consumers: a lot of theme clubs are offering very good value, but consumers will find it hard to compare different offerings. Theme shops will need to continue to refine their theme club offerings.
Know where you’re aiming
There are two clear conclusions to draw here:
- The general WordPress theme market is highly competitive and clustered around the $59 price point. This high level of competition is great for consumers and hard for theme shops – but offers an opportunity for theme shops able to differentiate and break out of the perfect competition.
- Niche themes can and should be priced higher. A well-designed and specialized theme can generate more revenue with fewer customers. Niche consumers are happy to pay more and niche theme developers should be happy to accept fewer customers and potentially higher revenues.
The future of theme clubs is less clear, but across the board we can safely conclude the market looks very healthy indeed. There’s space for more entrants and space for current theme shops to expand significantly.
In the end, the average WordPress theme cost market-wide is $59, and that’s the amount you’ll probably end up paying. In the coming years, that figure should rise, though, and that’s totally fine.
What do you think of this? Have you witnessed any other interesting trends in relation to the most common WordPress theme cost?
Layout and presentation by Karol K.