7 Not-Very-Mysterious Ways Online Entrepreneurs Make Money
Free Book Preview Entrepreneur Kids: Launch Your Own Business
Nowadays there’s all this talk about building online businesses but, for the most part, the experts forget to leave out the most important details! This makes most of the concepts NEBULOUS at best.
When it’s all said and done, most beginners have the same basic question: “How do I actually make money?”
How is it possible to do/create something in the “imaginary” Internet space and have it transform into real money that buys things like groceries?
Today, I’ll take a minute to break down the exact attitude you need to cultivate before starting an online business — then I’ll show you the simple ways that most online entrepreneurs use to make revenue.
First, check your attitude. One of the biggest problems that beginners have when trying to make money online is….THEY’RE TRYING TO MAKE MONEY ONLINE.
Believe me, I’ve been there.
Here’s the problem with that: the Internet is not some faceless, amorphous entity that you can just extract revenue from if you hit it with a pickaxe enough times.
This ain’t the Colorado gold rush, homie.
The Internet isn’t made up of code, or even the computers that create that code.
The Internet is made up of (wait for it…)
It’s made up of you.
You, reading this right now.
So if you want to make money on the Internet, remember that it’s not actually the Internet making you money.
It’s the PEOPLE reading your work, listening to your voice, or watching your show. Whatever platform you choose, the Internet is simply the way you communicate with PEOPLE.
The most common question I get is: “How can I make money with this blog/podcast/YouTube channel.”
That’s not the right question. The right question is, “How can I grow an audience of people who love my work, who would eventually consider buying something from me?”
What does this mean?
The Internet isn’t anything special. You can make money the exact same ways online that you can offline. The main advantage of the web is simply volume. For instance, every time I post something on Rich20Something, it’s like speaking to a packed 80,000 person auditorium. Just like in real life, some people are super engaged and some aren’t. Some people are sleeping in the back. But it’s that scalability that makes an Internet platform especially powerful. There’s nothing intrinsically special about the Internet itself.
Your primary focus should be on building an audience first, genuinely helping them, then monetizing later. Without that, nothing matters.
“...So, how do you make make money online?”
Once you build an audience on any platform (blog, podcast, video, etc.) you can create products that they want or provide them with things they’ve already been asking for. Here are the seven best methods for making money online.
1. Making information products to help people build a skill.
Maybe you’re an organic chef who helps people cook healthier meals at a lower cost. Could you make an recipe ebook, or even a video course on preparing healthy meals? If so, your audience might buy it.
I simply filled market demand. The response has been overwhelming.
2. Sell products that solve a problem or are just plain fun.
Why not open up an ecommerce store or learn how to dropship something? There are plenty of holes in the market waiting to be filled. Neville has a great breakdown of how to create a dropshipping business. Or you could always make a product that you know your audience needs —like Maneesh at Pavlok.
3. Create events or experiences.
Why not create a gathering of people and do an activity together? The seminar model has been around for years in the personal development world, but that’s not the only option for monetizing experiences. And I often find that these types of products really make you feel the best, both to sell and buy.
For instance, my friends Matt and Jared took their blog Under30CEO and pivoted the business model to build a travel company called Under30Experiences where they take young people on “adult spring break” all over the world. Really cool stuff --and something that’s sorely missing in the market.
...I went to Nicaragua in December and had the time of my life :)
YOU are your biggest resource -- and people who follow you for all the great free stuff you provide via your blog or YouTube channel or whichever platform you choose will be happy to learn more from you. Especially if the information you’ve provided them for free in the past has already provided value.
Here’s how to start: What do you already know that someone would pay you for? Hint: Most of us have SOMETHING. If you’re currently employed, there’s some piece of knowledge in there that a boss pays you to apply every day. What is it? When I started my own biz, I realized that college admissions test prep was my untapped knowledge source. I took my hourly rate from $18 to over $1,000 in some cases.
Related: How to Start a Business Online
As your audience grows, traffic grows. You can monetize this phenomenon by placing ads on your platform. Big blogs like Lifehack get SO much traffic that monetizing with ad revenue is a no brainer. It takes a lot of traffic to consistently make money from ads, but they can be part of a comprehensive monetization plan. This works on podcasts and YouTube channels as well. Just like in traditional TV and radio, owners can get paid to run ads for companies that want to access their audience.
6. Affiliate promotions/partnerships.
Don’t have a product to sell? Don’t have a service to offer? Don’t have enough traffic to generate revenue from ads? You can STILL connect your audience with products/services that they need and make a tidy profit. For instance, look at Pat Flynn’s revenue report for May 2014. You’ll see that of all his revenue sources, more than $38,000 of the $83,000 he made came from his partnership with Bluehost, a web hosting provider. The deal is simple: Since Pat likes and uses Bluehost for his sites, he recommends it to his audience. If his audience decides to buy the hosting service through the link he provides, Pat gets $65 from Bluehost as a “thank you” for the referral. The person buying the service is not charged anything extra.
Once you get one of the above models flowing and you’re able to create consistent, predictable success, it’s much easier to branch out into other revenue streams so that you’re not so dependent on one source. For instance, a lot of YouTubers start by monetizing their videos, then create merchandise and other products for fans.
There’s really nothing special about making money online. People are doing the same things online that they’ve been doing offline for years. The biggest difference is simply the SCALE at which the business can be done.
Your ability to create revenue from a content platform (such as a blog, Podcast, YouTube channel, etc) is almost entirely dependent on the relationship that you have with your audience. Build that first. Help people and build that trust. It takes time, so don’t get discouraged.