Wix Business Model – How does Wix Make Money

Wix.com, mostly known as Wix is a leading cloud-based web development platform that allows users to build and manage HTML5 websites with ease. Wix has become a go-to place for creating business and growing online business and has millions of users across the world.

In this competitive era, not only do businesses need an online presence but promote their online presence well and captivate users. Wix is one of the best website development platforms to do that as it offers drag and drop editor, logo creator etc features to create, edit, and hone the website or mobile site. Hence, it is just more than a website builder. 

Want to know how Wix makes money by helping millions of small businesses? Let us discuss it in this article. Before that let us see what exactly is Wix, its features, how it works and its business model to better understand how it makes money. So, let’s get started.

What is Wix?

Wix is one of the most popular website development service providers based in Tel Aviv, Israel. The company has been helping millions of users in developing stunning yet professional websites with its powerful technology. It helps users build websites and showcase their creativity to make and grow business. Thus no matter if you are an entrepreneur, or photographer or designer, or restaurant owner, Wix helps you enhance your career or business with its latest features and developer tools. In fact, Wix claims itself as an “all-in-one business solution”. 

Wix’s business model is based on the freemium model and it also makes money through multiple streams such as from Wix logo maker, domain registration, mailbox, etc. It also provides a dedicated CRM for business customers to manage their customer data and operations.

The leading website builder offers over 1000 innovative features and has more than 180 million customers in around 190 countries worldwide.

Key Products of Wix

Creation Platform

Includes website design, 800+ designer-made website templates, advanced web development on Corvid’s open dev platform, logo maker and blog website.

Website Essentials

Includes domain name, free web hosting, website security. analytics, roles & permissions, mobile app and multilingual website.

Wix for Enterprise

For creating, collaborating, launching and managing any project at scale with the latest technology and tools that suit your business needs.

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eCommerce Platform

To build an online store, manage orders and fulfillments, dropshipping, services and memberships, online payments and multichannel sales.

Business Tools

This consists of online scheduling, business email, phone number, ascend business solution, analytics & reports and app integration.

Boost Website Traffic

Wix offers tools for SEO, email marketing, social posts, video maker, and Facebook Ads(using Wix’s AI optimization).

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Engage your Clients

Use lead capture tools, financial tools, CRM by Ascend, mobile app and community management to engage your clients.

Hire a Partner

Wix helps entrepreneurs find the right partner for their business. You can either choose to pick a freelancer or an agency that perfectly fits your website needs.

All the tools and products offered by Wix suits the goals of any modern business.

Short History of Wix

Wix, an Israel-based software company was founded in 2006 by Avishai Abrahami, Nadav Abrahami (who is the brother of Avishai Abrahami) and Giora Kaplan. Initially, Wix was a flash-based website builder.

One year of its inception, Wix was available for beta users and in 2008 it was launched globally for all users. In 2010, the company experienced massive success as it had served 3.5 million users in just two years after its launch. Wix acquired 400,000 new customers every month during that year.

In the same year (2010), Wix raised $10 million in Series C funding. In 2011, it raised $40 million in Series D funding after its user base grew to 8.5 million.

In 2012, the flash-based technology was replaced by cloud-based technology as crawlability and difficulty to rank on search engines are key challenges of a flash-based site. In November 2013, Wix went into public on NASDAQ and raised around $127 million. The company had over 34 million registered users as of August 2013.

As said, today, Wix serves over 180 million users in over 190 countries.

Now let us look into Wix’s business model and see how it makes money.

Wix Business Model

Creating a website was a painful task a decade ago. However, the scenario is completely different today, anybody can create a website to run a business or to just create a portfolio. Thanks to all website builders. Again not all website builders do the job easily, some still require minimum programming knowledge or design skills or at least a good deal of money. But that’s not the case with Wix. Wix is a cloud-based web development platform that lets anybody create, manage and grow their business with ease using its tools. 

Wix offers simple drag and drop tools, editing tools, hundreds of designer-made templates for any type of website and blog. So, it just replaces coding or any complication with easy-to-use tools. It further provides domain registration, logo creation services, web hosting, SEO, marketing services that a business needs to surpass its competitors. Although Wix is free for website creation, the free version has limited features. It offers a wide range of features and exclusive support for paid users.

Having said that, like any other popular website builder, Wix provides its products and services for certain fees either a one-time payment or monthly subscription plan based on the products and services you choose.

How does Wix Make Money?

As you have already learned that Wix makes money through the fee it collects from paid users, let us discuss it in detail.

Wix works based on the freemium model which means it has both free versions as well as the paid version. The free version is limited to creating a website. Connecting it to the domain, domain registration, the huge collection of website templates are included in this plan. However, its free version acts as a marketing strategy to attract new users.

Now comes its different revenue streams that make money for the company.

Premium Plans

Unlike the free plan, premium plans include everything from creating a website, connecting to a domain, domain registration, storage and bandwidth to priority customer support.

The premium plans are categorized as Connect Domain plans, Combo Unlimited and VIP. The pricing and feature offerings vary based on which plan you choose. The fee ranges from $4.40/month to $12.25/month for premium plans. Also, the pricing is different for websites and Business & eCommerce.

The plans are divided based on purposes such as most basic, personal use, entrepreneurs & freelancers and first priority support.

App Market

Wix allows third-parties to develop and publish different applications that further extend the features of Wix on its app market. The applications can be customized pop-ups, statistics, live chat, maps, etc to enhance user experience.

The third-party apps are available for both free and fee. Wix shares revenue generated by such premium apps from third-parties.

Domain Registration

Users can buy and register a domain on Wix for a certain fee based on the domain extension, number of years, privacy protection, and tax. Although it offers free domain and registration for one year for premium members, it charges for other features such as privacy protection, taxes. Moreover, it collects money from premium members after the offer expiry.

Logo Maker

Wix lets its customers create their own logo for their website or blog easily using its Logo Maker. However, after the creation, it charges a one-time fee to download the image and get usage rights. Its pricing ranges from $12.99 to $49.99 based on the resolution, and add-ons.

Mailbox

Wix provides dedicated email addresses for its customers and their employees through Mailbox by Wix. The mailboxes are directly linked to either Microsoft or Google applications and offer a variety of benefits such as direct integration with the user’s website so that they can access it without any fuss and provide fast customer support.

Wix charges a monthly subscription fee for Mailbox and shares the revenue with Google and Microsoft as the company partners with them to provide the email services.

Ascend by Wix

Ascend by Wix is a CRM tool that helps businesses engage with their customers and build a strong customer relationship to promote their businesses. The tool helps in managing everything related to customers such as tracking leads, managing customer interactions, automating email responses, enabling chat features and the list goes on.

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Wix offers three types of plans and charges for Ascend users monthly.

SEO & Marketing Tools

Wix offers SEO and marketing services to help businesses rank higher on search engines and reach wider audiences. The services include SEO tools, email marketing, Facebook Ads etc without any need for extra plugins.

Wix Revenue & Fundings

The company reported a US $1 billion in revenue as of 2019. Wix has raised $58.5 million in all four funding rounds as of now. Its lead investors are DAG Ventures, Insight Partners, Mangrove Capital Partners and Benchmark.

It raised $127. million in the initial public offering and is valued at $603.9 million at IPO.

Bottom Line

As you have made it to the end hope you understood how an Israel-based DIY website company makes money. Started as a flash-based website development company, it adopted the latest technologies and shifted to a cloud-based website service provider. It launched many products and services and is offering new technologies and services to millions of users and businesses to grow their business. Wix has a long way to go as it constantly upgrades its services to provide the best customer experience.