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Top 5 Online Passive Income Streams for Busy Entrepreneurs

Thanks for dropping by hustler! Today, I’m going to be writing a long, detailed post on the top 5 online passive income streams for beginners. You probably want to save this to Pinterest or bookmark this page because I’m not kidding when I say it’s going to be long. (Not like my usual posts aren’t long enough. YAY for free knowledge!)

Here’s a little summary of what I will be covering in this post.

The top 5 passive income streams for beginners I will be covering:

  1. Kindle publishing
    1. What is it
    2. Why does it work
    3. How much can you earn
    4. Start-up guide to get you started
  2. Selling digital products on Etsy
    1. What is it
    2. Why does it work
    3. How much can you earn
    4. Start-up guide to get you started
  3. Affiliate marketing with blogging
    1. What is it
    2. Why does it work
    3. How much can you earn
    4. Start-up guide to get you started
  4. POD stores
    1. What is it
    2. Why does it work
    3. How much can you earn
    4. Start-up guide to get you started
  5. Dropshipping 
    1. What is it
    2. Why does it work
    3. How much can you earn
    4. Start-up guide to get you started

Why did I choose the above 5? All of the above have the opportunity to earn a minimum of a full-time salary, which I think is a respectable amount of money to be earning from a passive income stream. The above passive income streams are also well established industries.

What this means is the process and steps to success with these passive income streams are not a big question mark. There’s tens of thousands of other hustlers that have been there, done that and got the t-shirt. This makes your job a lot easier because you just need to copy other people’s steps to success.

Also, out of the 5, I have first hand experience with 4 of them. So I can vouch for the list as being easy and effective for anyone at any level of expertise. You just need to read the guide, follow it carefully and put in the work.

It’s that simple, no secret tips or tricks, you just have to follow the steps well.

So, let’s begin this post properly and you can start making money ASAP.

Kindle Publishing

Kindle publishing is the first on the list because I personally think it’s the best method to start earning any sort of money online. I think Kindle is the easiest way for anyone who has zero experience to earn a sizeable income or any sort, passive or active.

I personally have enjoyed this type of passive income stream for more than 3 years now and after expanding into other streams of passive income, it’s the easiest, fastest and steadiest passive income stream that exist.

What is it?

Almost everyone knows what a Kindle is, it’s an e-book reader created by Amazon. Kindle publishing is the publishing platform to create e-books for Amazon’s Kindle store.

So it’s basically creating digital content to be sold in the Kindle store on Amazon. But it has evolved over the years and Kindle publishing doesn’t just mean e-books for Kindle readers but also all other Amazon publication platforms. This includes the POD paperback service and audio-books.

That means when people say “Kindle publishing”, what they really mean is creating a publishing business through Amazon.

Why does it work?

Firstly, you need to understand that independent publishing isn’t easy and starting a publishing business is hard. The reason why Kindle publishing works, isn’t because of the nature of the product or business, but because of the unique business structure it involves.

AMAZON.

Kindle publishing works because of a few key factors, and they ALL revolve around Amazon.

1: You’re selling on Amazon’s platform 

Amazon is one of the world’s biggest online market places and it is THE best place to get the widest reach of international customers. (Taobao is the biggest market place in the world, but it doesn’t have an international reach like Amazon)

Selling on this one platform already allows you instant access to millions of potential customers. Not only that, but all these potential customers have the intention to make a purchase, which makes the likelihood of a sale so much higher than just any random person browsing online.

2: You’re reaching your customers through Amazon’s search engine

By only using Amazon to sell, you don’t need to compete in the big arena called the World-Wide-Web to find customers. Your customers free willingly go to Amazon to shop and therefore you only need to compete within the boundaries of Amazon.

That means the Amazon search engine.

But it’s not ANY Amazon search engine. It’s Amazon’s Kindle store search engine to be specific.

This makes your job to connect your product with your customer SO MUCH EASIER. And this is one of the biggest reasons why Kindle publishing is so easy.

Everything online is about connecting your product or service to the right audience by getting exposure through search and the Kindle store search engine gives you a highly focused audience that is ready to buy. You just need to rank for this small search engine.

3: Bigger profit margins with larger economies of scale with delivery and payment

After you produce the book and do the marketing for it, which you can outsource to other person; Amazon will take care of everything else.

And I mean everything.

This is a big reason why it’s a great passive income stream. You have this massive multi-national enterprise supporting your business for a small fee, without that support your business wouldn’t be passive nor very profitable.

Amazon takes care of delivery, technical issues, after sales service, payment as well as other things.

How much can you earn?

Realistically, an absolute beginner should be able to reach $1,000 per month within 6 months without much guidance. Just by working hard after learning the basics, will see you reach this point. If you spent some time to learn from someone through a mentor or a course, then I would easily say you’ll reach $1,000 per month within 3 months.

But that will depend on the amount of time you have to commit, as well as your upfront capital you can use to invest. And of course, what course you buy and who your mentor is. (Not every Kindle publisher is a great teacher, regardless of their great results.)

I personally took 6 months to reach $1,000 per month and I was going at it blind needing to test and experiment to understand what works. In total, it took me 1 year of active working to get to $2,000+ per month of passive income. This is the amount I’ve been enjoying for the past year with no additional hours of work.

But a better estimate for Kindle publishing’s potential would be $5,000 per month. I would say anything more than $5,000 per month would require more active work on your part to maintain and manage. This was one of the reasons why I personally chose to take a step back from Kindle publishing once I had hit $2,000 per month.

But not for long and you can read why here.

Start-up guide to get you started

You can get my free ebook guide to Kindle publishing here. Or if you’re more a visual learner, then you can check out my video lessons here. 

Selling digital products on Etsy

Selling on Etsy was the first type of online business I had ever started. And I famously wrote a post on how Etsy closed down my shop overnight, but for 6 months prior to this unfortunate event. I had passive income.

100% passive income. That at the time, I didn’t understand how to manage.

The good news is, I do now and I can confidently tell you how to make selling on Etsy a passive income stream.

What is it?

Etsy is a niche selling platform for handmade or vintage goods. The items command higher prices because of the handmade nature of the items and the customers who buy on Etsy appreciate a good story they can support. Be it a product story or a shop owner story. They like it.

Now, selling handmade goods isn’t very passive at all and so you won’t be selling physical products. Instead you’ll want to be selling download-ables. These products are essentially files.

You create files and upload them onto the Etsy platform that will take care of the delivery and managing of your product, and the customer can than safely download and pay for it. Think, greeting cards, posters, printables etc.

Why does it work?

Digital products/ files are one of the easiest product categories to start on Etsy because you just create the file once and leave it. And because you’re selling on Etsy, the whole time it takes to start earning money is extremely fast.

A lot faster than selling on your own website.

Just like Kindle publishing, you’re leveraging Etsy’s fame to connect your product to your potential customers. Etsy isn’t as big as Amazon but it gets millions of visitors everyday and these visitors are highly niche and focused. If you manage to create a product that fits the Etsy audience, you’ll get rewarded very handsomely.

People who go on Etsy are also not browsers. From my experience they convert more than Amazon visitors and are higher up on the buying decision process by the time they login.

Another big reason for selling digital products on Etsy specifically is because Etsy’s search engine is easy.

It was easy to rank when I started and it’s still easy to rank now.

The algorithm has gone through changes and you will need to adapt, but for Etsy shops that have a certain level of momentum (a certain amount of sales in a given amount of time), these changes will not have large effects. That means, rankings stay relatively stable.

You manage to rank for a keyword on Etsy and your product won’t get knocked down easily from competition.

How much can you earn?

The faster the process to set-up and start making money, the lower the potential for passive income to be earned. This phenomenon is true with most business models and Etsy is a very easy and fast method to creating a passive income stream.

Selling on Etsy was how I stumbled upon passive income and started this whole crazy adventure of mine.

It’s that easy. I managed to create passive income stream without having the intention to.

I was making $600 – 1000 per month, by the time my Etsy store was on auto-pilot. This was nowhere near the limit to my store or my niche. A realistic estimation to how much I could have earned if I carried on would be $3000 per month.

My niche wasn’t very big on Etsy and I think $3,000 per month would be the upper limit to what I could have earned. I would say if you’re in the wedding niche then that would easily go up to $10,000 per month.

Not all niches are created equally.

Expect to use a month to create your files and then another month to rank them. You’ll want to also spend another month or two to tweak designs and prices according to market feedback. That means you’ll need to put 4 -6 months of active work until you can start taking a step back from the day to day running of your business.

It took me 6 months to start making it semi-passive (less than 10 hours a week) and another 6 months to make it run by itself (realistically I was spending 5 hours a month in total on my store).

Start-up guide to get you started

I recommend you using Marmalead to improve your Etsy SEO. It helped me immensely to rank my listings on the first page.

Affiliate marketing with blogging

Okay, enough with the fast and easy. It’s time to showcase a passive income stream that has massive potential for huge earnings but is going to require some dedication and patience.

Blogging.

Blogging in and of itself doesn’t make any money, but using a blog as a platform to do affiliate marketing is a great way for beginners to create a passive income stream. It’s the easiest method and very simple to do. You just need to be dedicated and patient.

What is it?

Everyone knows what a blog is, but just incase; a blog is a digital journal or platform for the writer to write anything they want.

Blogs have grown and changed a lot since the early days of Xanga and blogger. (shoutout to anyone who knows what Xanga is, yes. I really am that old guys)

What once was a way to simply write whatever you wanted and most likely vent about life, has changed into a way to create entire business empires off on.

“I’m a blogger” is a now a legitimate answer to the question of “what do you do?”, and during this time between digital-public-diary and internet-savvy-entrepreneur, advertising and marketing happened.

It happened in a big way.

Out of all the ways to advertise and market, affiliate marketing has the lowest bar of entry while still promising good returns. (Adsense no longer pays $triple digits for clicks and leads and so I wouldn’t advice beginners to focus on adsense to monetise their blog with.)

The way it works is by the blogger acting as a middle man between the producer and the customer. Your job is to create the leads or find the audience to buy the product or service in return for a commission.

You can work with brands directly or you can work with them through an affiliate marketing platform. The latter is the easiest way to get started for beginners as everything is clearly set out for you and payment is safer.

After getting approved to be an affiliate, you can start promoting the product or service to your readers by linking to the product or service within your website. Depending on the terms and conditions between you and the brand, you will earn money from a reader buying, clicking or signing up.

Why does it work?

Affiliate marketing works because of a few core reasons.

Firstly, the changes in buying behaviour over the last few decades. With technology, everyone has the ability to create an audience and everyone is able to control who they want to listen to.

Affiliate marketing is the direct opposite of traditional marketing platforms of using big, impersonal platforms to advertise a product or service. People are opting for more and more personable and smaller platforms to discover products and services to buy, and bloggers are one of many smaller platforms people enjoy using.

Secondly, apart from the changes in buying behaviour, affiliate marketing is a solution for many small to medium size enterprises. These brands don’t have the big budgets like large companies and they don’t have the manpower to push the message across the internet to gain followers. So for them, having countless affiliates do the marketing for them solves a real business problem of theirs.

So now you understand the demand for this type of marketing from the customer and the need from the businesses, you also need to see why it’s worth your time to do it.

Affiliate marketing through a blog has the potential to become passive overtime IF done right. A blog that has a track record of success will find it’s posts staying relevant for a long period of time.

We’re talking years and years of ranking high for keywords on search engines. That’s a lot of steady traffic coming your way and a lot of opportunity to make a commission. Write the post once and profit off it for potentially years and years.

How much can you earn?

A blog has many ways to be monetised and you’ll be a fool to not use multiple ways to make money off your blog. But if we only look at affiliate marketing and nothing else. A beginner blogger after putting in the dedication and effort should be able to make a few thousand per month after a year or two.

You could start making money sooner, but by a year or two, you are bound to be making money if you’ve put in the work.

I wrote a post on how you can calculate the amount of traffic you need to your blog to start earning money here. Check it out if you have time, because I break down the numbers clearly for you to understand how a blog operates. Extremely useful information for anyone starting a blog.

A reasonable goal for a blogger would be $10,000 – $20,000 per month from affiliate commissions alone. Many blogs make six figures monthly, with affiliate commissions counting for a big chunk of that. I’m nowhere near this number right now, but from all the blogs I read and follow, $50,000 per month seem to be a ceiling a lot of bloggers hit.

$50,000 per month in affiliate commissions seem to be a common amount where many bloggers don’t surpass and then end up going into other income streams like selling their own products.

But $50,000 per month isn’t a bad number. I have never heard of anyone complain about getting $50,000 per month in passive income. Have you?

Thought not.

Start-up guide to get you started

I would recommend getting the course Making sense of affiliate marketing. The creator makes over $50,000 per month from her blog directly from affiliate marketing and over $100,000 per month from all her income streams together.

I had the lucky opportunity to interview Michelle about her course. You can read it here. 

POD Stores

POD stores are “print on demand stores”. I added this to the list after experiencing first hand how easy it was to start getting sales.

When done right, you can build a nice business that runs on auto-pilot. It’s doesn’t take too much technical knowledge or effort compared to many other passive income streams. All you need to do is learn how to rank for keywords.

You don’t even have to design the product…(I’m not joking)

What is it?

POD stores are e-commerce stores that create products on demand. There’s no inventory stored and the whole business model is rather streamlined and efficient.

The products you sell are only created when the customer places an order for it. This is where the opportunity to create a passive income stream exists.

Unlike traditional stores that have to buy and store inventory upfront, which eats away the profits. POD companies allow you to create only what you sell and nothing more. This maximises your profit margins and because you’re using a third party producer; you pay the vendor by the order.

Nothing is upfront, so unless you’re making money, they aren’t making any either. That’s why it’s a great beginner passive income stream. The risk is super low and the margins are great.

A lot of POD stores run on POD marketplaces such as Zazzle, Redbubble and CafePress. But you can also have an independent e-commerce storefront with a POD third party operator.

Why does it work?

POD stores are a great passive income stream because it’s very similar to selling digital products on Etsy. The marketplace/ third party vendor is doing all the heavy lifting for you.

The idea is the same, you are leveraging the size and fame of the marketplace to profit off on. Many of these marketplaces get a lot of traffic and you just need to rank within the marketplace to connect your product to the customer.

It’s a lot easier than starting a shopify store and trying to find your customers on Google search from scratch.

Additionally, similar to Kindle publishing, these POD marketplaces enjoy the benefits of economies of scale. This means they create products at a competitive price and deliver the goods efficiently. A lot more than if you were to attempt to do it yourself.

And of course, we can’t run too far from search engines and keywords. Each POD marketplace is a search engine you’re competing in and most of these search engines are nowhere near as sophisticated as Google, Amazon, Etsy. Not even Pinterest.

What does this mean?

It’s easy pickings to get the best spot for your products and get as much exposure within the marketplaces.

How much can you earn?

Many artists and designers that got into the POD game during the early days have created six figure empires from it, but these individuals are definitely not the norm.

Instead, a realistic number would be $3,000 per month in passive income if you rank well and implement a thoughtful strategy.

This will take some upfront effort to achieve and it will be comparatively harder than Kindle publishing but easier than selling on Etsy. I say this because of the nature of POD marketplaces. It’s no longer a secret that money is to be made on these platforms and as such, it has attracted a lot of money savvy entrepreneurs.

The ease of entry to the market is so low that the amount of people entering the market is so much higher than the other passive income streams that use a marketplace on this list. However, it’s still easier than Etsy because you’re still selling a physical product and not a file. It’s a lot easier to translate the value to the customers.

Buying something you can hold is valued more than a digital file on a computer.

Start-up guide to get you started

Step 1: Sign up and get approved to POD marketplaces.

Step 2: Research the platform for popular themes, niches and designs

Step 3: Hire a designer to create designs matching your research results.

Step 4: Upload it onto the platforms and start ranking your listings

Step 5: Observe which designs are doing well and make more

Step 6: Rinse and Repeat

The key to POD is speed so don’t take too long before pushing new designs out. You want to essentially flood the marketplace with what is working for you to maximise your sales and thus profits.

Dropshipping

Dropshipping was added to the list because of the maturity of the industry and the ease to get started. You can start a dropshipping store with a few hundred dollars and start making sales.

You can get up and running within 2 weeks if you know what to do and don’t procrastinate.

The simplicity of the business model makes it very attractive for beginners who have little to no experience with business. The skills you need to profit are also not too demanding for a beginner. A part from the usual SEO, keyword ranking, you’ll want to learn how to do paid advertising.

All of which are easy to learn.

A few hundred dollars and 2 weeks of hard work is all you need to get started. How can you not give this passive income stream a go?

What is it?

Dropshipping is when you sell goods from suppliers and profit the difference between the supplier price and the price you charge the customer.

There are a few variations of dropshipping, but the essential characteristic is similar to POD businesses.

You offer a selection of goods in your store, and orders from your store are sent to your supplier to be sent out directly from them.

For example, if the supplier is selling a product for $10, and the retail price is $15 then you can safely charge $15 on your site and pocket the $5 difference as profit.

Why does it work?

The main reason why it works is because of the cost effectiveness to attract quality leads to your store with paid ads.

Dropshipping just wouldn’t be worth it without the ease of creating paid ads at a low cost. Because paid advertising is the main source of attracting customers to your store.

It’s not your brand, though that could happen after you’ve been in business for sometime.

It’s not your products, because a beginner will only have access to products that every other drop shipper can sell as well.

Dropshipping is a pure numbers game of keeping your cost per action as low as possible. Create brilliant paid ad campaigns (which isn’t hard to do) and start making sales.

And the great thing about ad campaigns, you can auto-pilot the process once you figure out what works. The amount of maintenance work would be minimal with only a few hours a month to make sure your campaigns are still working.

How much can you earn?

$5,000 per month is realistic for a beginner to achieve, if you sell high ticket items. You should be expecting to achieve this number within 6 – 12 months of work. This all depends on how fast and good you are at learning how to do paid ads.

But $5,000 is definitely not the limit to dropshipping, it just seems like the average number many sellers are achieving. I’m not talking about the famous internet gurus, but just average people who bought a dropshipping course and then started.

Start-up guide to get your started

Shopify is definitely the only option you should consider if you want to create an e-commerce business, but if you’re still not entirely sure, then enjoy a 14 day free trial with my special link.

Conclusion

  • Affiliate marketing through a blog will take the longest time to start making money from
  • Kindle publishing will be the fastest to start making money from
  • Dropshipping is the hardest method to succeed at
  • Kindle publishing is the easiest method to succeed at
  • Affiliate markting through a blog has the highest earning potential
  • Selling on Etsy or a POD marketplace has the smallest overall monetary potential
  • Selling on Etsy and POD marketplaces have the smallest learning curve
  • Affiliate marketing through a blog and dropshipping has the biggest learning curve

Other resources you should also check out:

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2 comments
  1. Darell Alekna

    Wow! Thanks! I have wanted to enter in my webblog something similar to that. Can I reference part of your post to my site? Thanks once more for sharing this online. I certainly loved every bit of it.

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