This post is part of the Course Creation Myth busting series: Because courses rock… but there is plenty of bull out there, it’s time to share some truth.
Courses are the only type of passive income
Firstly, I don’t believe that courses are completely passive… (I’ve ranted about this a fair few times before, and I am sure you will hear me rant about it again!)
Anyway, I digress.
Often I hear that courses are the only way to make passive income… or even the easiest/best way to earn passive income.
So, that’s true right?
Wrong.
There are lots of ways that you can look at including passive revenue streams into your business. In fact, there are plenty of ways that are more “passive” than building and running a course.
Before we go too far though, I want to let you know… I don’t believe that ANYTHING is completely passive. There is always work involved.
That might be work at the beginning, in the middle or even at the end. That work might include writing, marketing, fixing your SEO, work, work, work (but not like the terrible Rihannah song).
Successful people work hard. They might have put in a lot of the hard work a long time ago, and now they are reaping the rewards, but there was hard work involved. They just don’t always show all of it on social media.
Ultimately, the options in the list below mean that you don’t have to show up everyday, 9-5, to get paid… but you are definitely going to put some work in along the way, and it isn’t always easy.
Anyway, back on track.
Ways that you can make “Passive” income.
– Affiliate payments.
Simply put, this means getting payment for selling someone else’s product or service. You may also see this being called a commission.
In most cases, you will be given a link that is unique to you. You share this link when you tell people about the product or service. You can do this on social media, through video or by creating great blog posts about the product. When people click on your link, the site tracks where the traffic is coming from, and if they buy then you are allocated a portion of the sale. In some industries this could be as low as 5%, but often in the world of digital products or services, you could be making up to 30% – 50% of the sale.
Sometimes this payment is one off, and sometimes you continue receiving payments for as long as they remain a client.
Things to note: You’ll need to make sure that you follow any rules and regulations from the provider and for the platform that you are promoting on. These vary from company to company, so make sure you check.
As a minimum, you will normally have to declare that it is an affiliate link and that you may receive payment if they decide to purchase.
– Ad revenue
You can receive money for ads placed on your content. There a lots of different ways that you can do this.
You may decide to sell space on your podcast, youtube videos or on your blog personally. You may decide to use Adsense or Mediavine, who place adverts on your blog posts for you… and you may decide to monetise your Youtube channel so that they place ads before or during your videos automatically.
Ad revenue is often based on the number of people who see the ad, so you might not receive a lot of money unless you are getting a lot of traffic.
– Royalties
Royalties are payments you receive for allowing someone to use your intellectual property, like copyrights, patents and trademarks. You might receive a one off payment, but you will often continue to receive payments over the period of time which the product is being used, or an additional payment each time an extra one is sold. There are lots of different ways that you could earn royalties including from book sales, from music, from photos or from art work.
– Selling downloadable content
When I typed this heading, I was thinking content like ebooks, guides and templates… but then I started talking to my mastermind group and the list just kept expanding.
Think graphics, stock photos, fonts, WordPress templates or plugins… the list is endless.
You might sell your content on your own site, or put it one a larger site, such as placing your font in a font library.
You may also sell your content one by one, or bundle things together for larger sales.
Really, when it comes to selling your content online, the list of what you can sell and how you can sell it, is endless.
– Drop Shipping
“Drop shipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.” from Shopify
The upside of drop shipping is that you don’t have to hold any stock. This means that you don’t need the money to invest in stock to start with, you don’t need a warehouse to store it in, and you don’t run the risk of buying too much of something, which might not sell as well as you thought it would.
There are some downsides to drop shipping. Margins are often tighter and you might not make as much profit per sale, as you are relying on someone else to store and ship the product. You also have to be careful where you sell your product. While you can run a drop shipping business on Ebay, you can’t on Amazon (unless you use their drop shipping platform).
Lastly (and this applies to everything in this list) you need to know how to market your product.
This is not a case of build it and they will come. You will need to know how to market and promote the product you are selling to get the number of sales you need, to make a sustainable income.
– Develop an App or SaaS
What the hell is SaaS Sam?
It’s ok, I got ya.
SaaS stands for Software as a Service. Simply put, this is software that is sold to you on a licensing and delivery model, something which you pay to use, monthly or annually.
There are countless examples of SaaS, in fact you are probably already paying for a few.
Think things like Xero (or other bookkeeping software), Zoom or GoToMeetings, Leadpages, Convertkit… and many, many more.
Yup… just like the other “passive” models that we have mentioned, there is definitely work involved. Getting your app or software up and running is going to take a huge amount of time, effort and possibly investment. Once it is up and running smoothly though, you can pay a customer service team to look after your customers, and developers to look after your updates.
Want to check out some examples? You can see live financial reports for Convertkit here ($1.09m monthly turnover Sep18) and for Buffer here ($1.49 million monthly turnover Sep18).
And lastly…
– Create an online course
I couldn’t leave this off the list
While it’s not the ONLY way to create a leveraged income (I refuse to call it passive… you can see why here) it is definitely one way you can add an extra revenue stream to your business.
Just like selling downloadable content above, there are countless ways you can build, host and sell your course. You can even use affiliates to promote your course for you.
But at the end of the day, participants in your course will need support. You might do this yourself, or you might chose to outsource it, but you will need to make sure that they are looked after.
So there you go… there are plenty of ways to make leveraged income online (let’s stop calling it “passive” shall we!)
Which of these do you use in your business? And which are you thinking of using in the future?