Preply Business Model Explained: How the Online Tutoring Marketplace Works and Makes Money

The education market has undergone a dramatic transformation over the past decade. Traditional classroom settings and rigid schedules are giving way to flexible, personalized online learning experiences. Students no longer need to commute to language schools or coordinate conflicting schedules with local tutors. Instead, they can connect with qualified instructors from around the world with just a few clicks.

Preply has emerged as a leading player in this online education revolution, particularly in the language learning space. This guide examines Preply’s business model, explores how the platform generates revenue, analyzes how tutors earn money, and investigates why this marketplace continues expanding globally despite increasing competition.

What Is Preply? Understanding the Platform

Preply operates as an online tutoring marketplace that bridges the gap between students seeking knowledge and instructors offering expertise. The platform specializes primarily in language learning but has expanded to include various educational services.

Core Platform Offerings:

Language Learning: Preply’s primary focus includes instruction in English, Spanish, French, German, Italian, Chinese, Japanese, and dozens of other languages. Students can learn everything from basic conversational skills to advanced business communication.

Academic Subjects: Beyond languages, the platform offers tutoring in mathematics, science, history, and other academic subjects, supporting students from elementary through college levels.

Professional Skills: Career-focused learners can find tutors specializing in business communication, interview preparation, test prep, and industry-specific language skills.

What distinguishes Preply from traditional education companies is its marketplace structure. The platform doesn’t employ tutors directly or create curriculum centrally. Instead, it functions as an intermediary, providing the technological infrastructure, payment processing, scheduling tools, and discovery mechanisms that connect independent tutors with paying students worldwide.

This approach allows Preply to scale rapidly without bearing the overhead costs associated with maintaining a full-time teaching staff, while giving tutors entrepreneurial flexibility to build their own practices.

The Core Business Model: Two-Sided Marketplace Economics

Preply operates on a classic two-sided marketplace model that creates value by efficiently matching supply (tutors) with demand (students). Understanding this model requires examining how the platform serves both constituencies while capturing value from the transactions it facilitates.

Marketplace Dynamics:

On the supply side, tutors join the platform seeking students, flexible work arrangements, supplemental income, or full-time teaching careers. They create profiles showcasing their qualifications, teaching experience, specializations, and personality, then set their own hourly rates based on their expertise and market positioning.

On the demand side, students search for tutors based on criteria including language or subject matter, price range, availability windows, teaching style preferences, and tutor ratings from previous students. The platform’s search and filtering capabilities help students narrow thousands of options to find instructors matching their specific needs.

Preply’s role centers on facilitating these connections efficiently. The platform provides video conferencing technology, secure payment processing, automated scheduling systems, student-tutor messaging, and review and rating mechanisms that build trust and accountability.

By positioning itself as the essential infrastructure connecting tutors and students, Preply captures economic value from transactions it enables while allowing both sides to benefit from the marketplace network effects that emerge as the platform scales.

Revenue Generation: How Preply Makes Money

Preply has developed a revenue model centered primarily on commission-based monetization, with several complementary strategies that together create a sustainable business.

Commission Structure: The Primary Revenue Stream

Preply’s main income source comes from charging tutors a percentage commission on their lesson earnings. This commission-based approach means the platform only earns money when tutors successfully deliver paid lessons, aligning Preply’s incentives with tutor success.

The commission structure operates on a tiered system designed to encourage tutor loyalty and platform engagement. New tutors entering the marketplace typically face commission rates as high as 33%, meaning Preply retains one-third of their lesson revenue. However, as tutors complete more hours on the platform, their commission percentage gradually decreases.

This declining commission model serves multiple strategic purposes. First, it rewards tutors who stick with the platform long-term rather than treating Preply as a temporary solution. Second, it compensates Preply for the higher marketing and acquisition costs associated with new tutors who haven’t yet established reputations. Third, it creates retention incentives where experienced tutors would sacrifice their favorable commission rates by switching to competitor platforms.

Top-performing tutors who’ve completed hundreds or thousands of lessons can achieve significantly lower commission rates, improving their effective earnings while maintaining their student base on Preply’s platform.

Trial Lesson Policy: Controversial but Strategic

One of Preply’s most debated policies involves trial lessons—the initial session between a tutor and new student. For many tutors, this first lesson generates no direct income. Instead, Preply retains the full trial lesson payment as a platform fee.

While this policy generates criticism from tutors who invest time and effort into trial sessions without immediate compensation, it serves important business functions for Preply. The trial lesson acts as a student acquisition tool, lowering the barrier for hesitant learners to try the platform. It reduces student churn by allowing learners to test compatibility before committing to lesson packages. It improves matching quality by giving both parties a low-risk opportunity to evaluate whether they work well together.

From Preply’s perspective, the trial lesson revenue helps offset the substantial marketing costs required to attract students to the platform. Since acquiring students typically costs more than acquiring tutors in educational marketplaces, this policy essentially asks tutors to share in the customer acquisition expense.

Despite the controversy, the trial lesson model has proven effective for platform growth, though it remains a source of tension between Preply and its tutor community.

Lesson Packages and Subscriptions

Preply encourages students to purchase lesson packages or subscribe to monthly plans rather than buying individual sessions. These packages might include 5, 10, or 20 lesson credits that students can schedule over time with their chosen tutors.

This packaging strategy benefits Preply in several ways. It creates more predictable revenue streams rather than relying on unpredictable single-session purchases. It increases customer lifetime value by committing students to multiple lessons upfront. It improves retention rates since students who’ve prepaid for lessons are more likely to complete them. It provides working capital since Preply receives payment before all lessons have been delivered.

For students, packages often come with discounted per-lesson rates compared to single-session pricing, creating incentives for larger upfront commitments. For tutors, packages mean more predictable scheduling and reduced time spent on student acquisition.

This subscription and package approach transforms Preply’s revenue from transactional to recurring, improving the platform’s financial predictability and valuation multiples.

How Tutors Earn Money on Preply

While Preply’s revenue model is straightforward, tutors’ earning potential depends on multiple factors that determine their success on the platform.

Tutor Autonomy and Pricing Control

Unlike many educational platforms that set standardized rates, Preply gives tutors substantial control over their business operations. Tutors independently establish their hourly rates, decide their availability and scheduling, choose which subjects or languages they’ll teach, determine their teaching methodologies, and set their own policies regarding cancellations and rescheduling.

This entrepreneurial model means tutor earnings vary dramatically based on their positioning and execution. Hourly rates on Preply range from as low as $10 for beginning tutors teaching common languages to over $100 per hour for highly specialized instruction or test preparation from experienced educators.

Factors Influencing Tutor Income

Several variables determine how much money tutors actually earn on the platform:

Pricing Strategy: Tutors must balance competitive pricing against perceived value. Rates too low may attract students but limit earning potential, while prices too high may result in insufficient demand.

Student Retention: Successful tutors build long-term relationships with students who book recurring lessons. High retention reduces time spent on trial lessons and student acquisition, increasing effective hourly earnings.

Profile Optimization: Compelling profile descriptions, professional photos, demonstration videos, and clear value propositions help tutors stand out in a crowded marketplace.

Review Accumulation: Student ratings and written reviews heavily influence booking rates. Tutors with numerous positive reviews attract more students and can often command premium pricing.

Availability: Tutors offering flexible scheduling, including evenings and weekends, tend to fill their calendars more consistently than those with limited availability.

Specialization: Teaching high-demand languages like English or Spanish to business professionals often pays better than less common languages or general conversation practice.

Top-performing tutors on Preply report earning several thousand dollars monthly, with full-time tutors in high-demand specializations potentially earning $50,000 to $100,000 annually. However, these earnings represent the upper end of the distribution, with many tutors using the platform for supplemental rather than primary income.

Why Students Choose Preply Over Alternatives

Understanding Preply’s growth requires examining why students select this platform over traditional language schools or competitor marketplaces.

Student Value Proposition:

Personalized One-on-One Instruction: Unlike group classes where instruction moves at the average pace, private tutoring on Preply allows lessons customized to individual learning speeds, goals, and interests.

Global Tutor Selection: Students aren’t limited to instructors in their geographic area. They can learn from native speakers worldwide, accessing authentic accents and cultural perspectives impossible in traditional local settings.

Flexible Scheduling: Preply’s 24/7 availability across global time zones means students can book lessons fitting their schedules, whether early morning before work, during lunch breaks, or late evening.

Transparent Pricing: Clear hourly rates displayed upfront eliminate the confusion often associated with language school pricing structures with hidden enrollment fees, material costs, and rigid payment schedules.

Risk Reduction Through Trials: The trial lesson system allows students to evaluate teaching style and compatibility before making significant financial commitments.

Convenience: Learning from home eliminates commute time and expenses while providing comfortable, familiar environments conducive to practice and error-making.

These advantages make Preply particularly attractive to busy professionals, parents balancing family obligations, and learners in areas without access to quality language instruction locally.

Growth Strategy: How Preply Attracts Users

Preply’s expansion relies on sophisticated marketing strategies that efficiently acquire both tutors and students while maintaining favorable unit economics.

Digital Marketing Excellence

Preply invests heavily in search engine optimization, ensuring the platform ranks prominently for high-intent keywords like “online English tutor,” “learn Spanish online,” “French lessons online,” and “German tutor near me.” This organic search presence generates consistent, cost-effective student acquisition.

The platform complements SEO with paid search advertising, targeting users actively searching for language learning solutions. Performance marketing allows Preply to carefully control customer acquisition costs while scaling in profitable markets.

Content Marketing Strategy

Preply produces extensive educational content including language learning tips, grammar guides, vocabulary resources, cultural insights, and study strategies. This content serves dual purposes: attracting organic search traffic and establishing Preply as an authoritative voice in language education.

Additional Growth Levers

Referral Programs: Both tutors and students can earn credits or discounts by referring new users, creating viral growth loops.

AI-Powered Matching: Sophisticated algorithms suggest tutors matching student preferences, improving first-lesson success rates and reducing churn.

Review Ecosystem: Prominent display of tutor ratings and student testimonials builds trust and provides social proof encouraging platform adoption.

Promotional Discounts: Strategic discounting, particularly around New Year’s resolutions and back-to-school seasons, capitalizes on peak interest in education.

Corporate Partnerships: Preply increasingly targets businesses offering language training as an employee benefit, creating bulk customer acquisition opportunities.

This multi-channel approach allows Preply to maintain growth without over-dependence on any single acquisition channel.

Competitive Advantages and Strategic Moats

Preply has built several defensible competitive advantages that protect its market position against both existing competitors and new entrants.

Marketplace Scale and Liquidity

With thousands of tutors spanning numerous languages and time zones, Preply offers students extensive selection that smaller platforms cannot match. This selection advantage creates a self-reinforcing cycle where more students join because of tutor variety, which attracts more tutors seeking students, further enhancing selection.

Flexible Pricing Across Budget Ranges

By allowing tutors to set their own rates, Preply serves everyone from budget-conscious students seeking $15 per hour instruction to executives willing to pay premium rates for specialized business language coaching. This price flexibility expands Preply’s addressable market compared to platforms with standardized pricing.

Performance-Based Retention Model

The declining commission structure creates powerful retention incentives. Experienced tutors with favorable commission rates face significant switching costs to move their practice elsewhere, as they’d reset to higher commission tiers on competing platforms.

Global Reach and Network Effects

Serving learners across more than 100 countries creates powerful network effects. International students learning English can find native speakers, while English speakers can access authentic native speakers of virtually any language they wish to learn.

Challenges Facing Preply’s Business Model

Despite its success, Preply confronts several challenges that could impact long-term sustainability and growth.

Tutor Churn and Satisfaction: The trial lesson policy and high initial commission rates create dissatisfaction among some tutors, leading to turnover. If top tutors leave for competitor platforms, Preply’s quality and selection advantages erode.

Intense Competition: Established platforms including iTalki, Cambly, Verbling, and specialized language apps like Duolingo compete for the same students and tutors, requiring Preply to continuously improve its value proposition.

Balancing Stakeholder Interests: As a marketplace operator, Preply must balance tutor earnings against student affordability while maintaining its own profitability—a challenging optimization problem as competitive pressures increase.

Quality Control: With thousands of independent tutors, maintaining consistent teaching quality and positive student experiences requires robust vetting, monitoring, and feedback systems.

Regulatory Complexity: Operating globally across 100+ countries involves navigating diverse regulatory environments regarding education, payments, taxes, and data privacy.

Successfully managing these challenges while maintaining growth requires careful attention to marketplace health metrics and willingness to evolve policies based on feedback from both tutors and students.

Profitability and Financial Strategy

Like many technology marketplaces, Preply has prioritized growth over near-term profitability, investing heavily in expansion activities. Marketing and student acquisition costs remain substantial as the platform competes for attention in a crowded online education market. Platform development expenses continue growing as Preply builds AI-powered features, improves video technology, and enhances user experience. International expansion requires localization efforts and market-specific strategies.

The path to profitability depends on improving key metrics including tutor retention rates that reduce replacement costs, increasing student lifetime value through longer engagement periods, and reducing customer acquisition costs through word-of-mouth and organic growth.

As the platform matures and network effects strengthen, these metrics should improve naturally, eventually allowing Preply to achieve sustainable profitability while maintaining growth.

Conclusion: Why Preply’s Business Model Works

Preply’s success stems from solving a fundamental problem elegantly: connecting students seeking personalized language instruction with qualified tutors offering expertise, at price points working for both parties.

By operating as a global marketplace rather than a traditional education company, Preply has built a scalable business model that benefits students through extensive selection and flexibility, rewards tutors with entrepreneurial opportunities and earning potential, and captures value for the platform through commission-based revenue sharing.

The model works because it reduces friction in an historically inefficient market. Previously, finding quality language tutors required geographic proximity, limited selection, and opaque pricing. Preply transforms this experience, offering global access, transparent pricing, and quality signals through reviews and ratings.

As online education continues expanding and remote work normalizes learning from home, platforms like Preply are well-positioned to capture growing demand for flexible, personalized instruction. The marketplace model’s inherent scalability, combined with strong network effects and sophisticated matching algorithms, creates a sustainable competitive advantage that should support continued growth across global markets.

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