There are a lot of different ways to earn money online. For those out there that are looking to make money on the internet but not sure what fits their goals, interests, and skills, this post is for you. Although there are many different types of online businesses we will make a distinction between Advertising and Products and/or Services.
I should note that a lot of online businesses fall between these two categories. Let’s say you have a niche site that talks about Radio-Controlled Helicopters and you provide both valuable information to your audience, you could consider the information you provide a product that you deliver through your website. However, it is likely that most of the income that you generate through your website comes from affiliate marketing (for example product reviews linked to Amazon) and maybe Google Adsense. In an example like this I would consider a niche site about RC Helicopters in the category advertising.
In this post, you will find a brief description of the main types of online businesses, their advantages, disadvantages, and other remarks. So let’s jump right in and let’s look at the different types of online businesses so you can decide what works best for you!
A lot of people build online businesses around advertising and this is a direction that can take many different shapes and forms. A lot of niche sites are build in order to capitalize on advertising within a certain small area of a market. When you are looking to generate income with advertising there are a couple of options that you have. You can use Google Adwords, Affiliate marketing, paid or direct advertising or a combination of all.
Google AdWords is the placement of banners or advertisements on your website. You do this by adding a simple line of code on your website and Google automatically pushes advertisements that are suitable for your audience. You can get money once people click on your banner. Google AdWords is a numbers game and, in general, to earn substantial money you need a lot of unique monthly visitors. There are a lot of websites that are able to generate substantial online income from Google Adwords, but it is not easy as you need to rank very high in order for it to work.
Google Adwords has been a popular tool to monetize so-called niche sites, but Google has been less friendly towards to these type of sites. Sites that have the sole purpose to rank high on keywords in order to drive visitors in order to generate ad money are getting less and less traffic from Google. Google wants to see unique content and value within websites and thus makes it a lot harder to quickly set up a niche site to earn money.
So Google AdWords is a good way to start monetizing your blog/website. It is important to know if this fits within the strategy of your brand and market. Typically, a website that has a strong focus on information and not on building relationships, do well with Google AdWords. For example, a very informative website about car parts, where most people are less likely to return once they found the information they were looking for. Tropical U.P, on the other hand, is a website where I want to build a relationship with you, the reader. Personally I do not want to degenerate the user experience for some AdWords income. At the end if AdWords works for your website depends on your audience and your strategy.
Affiliate Marketing is indirect marketing that is linking to a domain that sells a product or service. If you, for example, have a blog about paintball markers where you write reviews of certain models, in your text is a link to Amazon that people can use to buy the product when they feel it suits their needs. Affiliate marketing also ties in closely with niche sites. Sites can be built around a small area and to provide people that are highly interesting with detailed information about a certain product or service.
Affiliate marketing is all about products or services that you are promoting or endorsing but that are not yours. Affiliate marketing can aim different types of visitors, maybe you are interested in one time visitors that are for example looking for a certain review, once they buy they are not likely to visit your website again. You can also help people with a particular product or service by for example creating how-to videos, you help them with their problems and build a relationship in return. What works best for you depends on your personal goals and the niche or area that you plan to operate in.
So Affiliate Marketing is a good tool to monetize a site that has loyal followers. Important is that you use the engagement with your visitors by providing value and being sincere about the products that you promote. Pages full of affiliate links do not sit well with Google and could give the wrong message to your audience. On a personal note, I only feel comfortable promoting things I have used myself and that I am enthusiastic about, this, unfortunately, is a rule that not everybody follows.
Direct or Paid Advertising is when you are directly promoting a certain product or service to your audience via your content. This could be an advertisement on your podcast or vlog, or advertising on your website without using Google AdWords (so basically no intermediary). In order to have paid advertisements on your website or page, you will need a large audience. Advertisement is also a good way to for example monetize a large Instagram following or a lot of Youtube subscribers. Advertisement fees are usually based on your unique visitors, downloads or views.
Once you have an established name paid advertising is a good tool to generate additional income. Many now famous podcasters earn almost all their money with advertisements and there are a lot of potentials here. It would be advisable to not just advertise any product or service that is willing to pay you. Similar to affiliate marketing, you should not sell out to your audience by promoting things too pushy are that are not relevant to them.
So Direct Advertising is a good way to monetize a current audience that you already have. Potential of your earnings depend on the size of the current audience that you have, which is usually calculated by the 1000’s. Direct Advertising is an important tool for companies as they have direct access to your audience, which is likely also directly their market. Key to direct or paid advertising is that you should also aim to bring value through your advertisements to your audience. Do not give your adience the feeling that you are selling out in order to make extra money. If you for example have a podcast about classic cars and you have an advertisement on your show about facial products it is most likely not a good fit for both you and the brand.
PRODUCT OR SERVICE
An Online Business allows you to sell a product or service directly to audience or customers. There are a lot of different types of products that you could sell and many different marketplaces to sell your product. In this subchapter, you can find information about possible products or services that you could sell and the different marketplaces that you could use. Know that there are a lot of different products and marketplaces and the possibilities are endless, I will not discuss everything in detail, but the information below should give you a good idea of what is possible.
Types of Products or Services
There are a lot of different types of products that you could sell that allow you to earn an additional income online. As we are talking about (additional) online income, only products will be included that could be fairly automated and that don’t require full-time work to sell.
Digital Products are all types of products that people can buy online and immediately receive. This can be audio, video, published material, courses etc. The big advantage of digital products that they don’t require additional investment once they available on the market. If you have a physical product you will still need to pay production cost for every unit. Of course, a digital product still requires work, for digital products it could be important to keep your work updated to follow current trends and developments.
EBooks are rapidly gaining more and more popularity. EBooks are digital products but such a big deal that I decided to discuss them separately. EBooks don’t necessarily mean 500-page novels but could also be short books that contain a lot of specific information of a certain topic. It is very easy to sell EBooks to an existing audience on your website or sell them over a market platform like Amazon. EBooks require time upfront to write, edit, design, publish and promote, but once published they allow you to earn money years from now.
Physical Products are products that you sell online, but that require inventory, shipping, purchasing etc. You can sell physical products through your own website or through a marketplace online. In general, physical products have a higher risk and require more work from your side. There are ways to automate processes of physical products by working with a drop-ship company. A drop-ship company could handle shipment and inventory of your product for a small cut of your selling price. This reduces some of the time that physical products require, the initial investment is still higher as you do need to keep an inventory.
Services can include a wide range of differents that you can offer to your audience or potential clients globally. The key with services is that they are able to be provided through the internet and therefore not related to geographical pressence. Services can include coaching, web-design and programming, content writing and editing, audio/video editing, social media management and many more. Services could allow you to help others within your expertise while you are building out your own business, giving you both more experience, income and credibility.
There are a lot of different options to offer your products on the internet. Below you can find general information of possible market places and how they work. Note that there are a lot of market places and that the best market place for you depends on your specific situation.
Personal Website in my opinion a personal website is always the best way to display your services or products. A personal website can be a hub for all related information that your clients/customers can use to learn about the latest developments and updates. It is a place where you have 100% control, which is very important. A personal website is also a tool that can only increase in value and allows you to pivot according to opportunities you see for your online business.
Imagine you offer web-design but only through a third party market place, what happens to your income when this market place discontinues their business? Or what if a market place decides to block or bans your account because they have decided that your account does not align with their goals anymore. Basically you are putting all your chances and income within a single source, a source you don’t own. When it comes to my personal income and therefore also my future, I prefer to be in control.
Amazon is a serious player in the ecommerce space. Amazon allows entrepreneurs to sell their products through their site for a percentage of the price. They also handle everything from taking the order to delivery. You can use Amazon to sell a wide range of products, from EBooks to Yoga mats and make use of their massive exposure. Payments are generally made to your account after the month and payment period is over. It is also possible to have your product directly shipped to an Amazon warehouse so they handle the rest, this process.
Other third party market places are also available for selling products or services. Sites like Fiverr.com or 99designs.com allow you to offer services related to copywriting, design and programming. On these types of sites, you are able to bid on projects that you are interested in and once you are awarded the job the rest is up to you. The competition on these sites is strong and people from all over the world are able to bid on the same projects, making prices very competitive. Every site works in a slightly different way so it is advisable to first screen how they work and if this suits your personal situation.
If you wish to sell products there is a myriad of options. The iTunes store is something that is hard to ignore but beware of their terms and approval process. Still the iTunes has a HUGE user base and ranking high in a certain category can boost your income potential. You can also choose to sell your product through sites like ebay.com but for more commercial activities there might be more suitable alternatives. Another site worth checking out is Etsy.com, having successfully completed their IPO, Etsy is here to stay. They have a lot of visitors and there are some people making serious money of it.
There are a lot of different types of online businesses and there are many options for you to consider when building you own business. Personally, I think that the best way is to always start with a website and/or blog that you can transform in a hub where you post everything related to what you do. I feel that the level of control that comes with a personal website is invaluable and a website as unlimited potential once you are building your own brand. A personal website also makes it easier to pivot when you see new or other opportunities.
There has been a lot of debate on the internet with regards to niche sites, I believe that a niche site can still work but however, it is not as interesting as it was before. Google takes less friendly to ad loaded websites and an overkill in affiliate links and it is simply a lot harder and more work to rank higher. Personally I prefer to build a long lasting relationship with my audience to create something that is both valuable and sustainable.
In the end, it all comes to down to a personal decision. It is unlikely that Adsense or affiliate marketing will disappear, I do believe that people on the internet are looking for meaning, value and most of all honesty. Another suggestion you could consider is starting with a personal website and turn this in a brand while you are creating other streams of online income. Good luck!
What do you think, which type of online business is most suitable for you and how do you plan to monetize your online presence? I am looking forward to your comments and let me know if you feel that I should include a different type of online business! Thanks in advance and stay awesome!