People love to talk about passive income, but they don’t really tell you how to get to that level. Today we’ll show you our three favorite passive income opportunities for online businesses. You will learn how you can start implementing these things into a new or existing business.
What Is Passive Income?
Passive income takes activity on your part to get started. Having sufficient passive income is possible, but it usually comes from many income sources. We have about 20 income sources, and a lot of them are happening even while we sleep.
You may be trying to get passive income quickly. Realistically, it does not happen right away. By putting in a little effort over the next month, six months, and beyond, you will see passive income starting to come into your bank account.
Our first tip is our favorite way to start making money and turning it into passive income. It’s called ecommerce. Why is ecommerce one of the best passive income opportunities out there? Think about everything going on in the world right now. You have probably been ordering things mainly online for the past few years. Buyers continue to double month after month through online shopping. Wouldn’t you want to start your business around an industry that is already on the up? Of course you do! That is why ecommerce is our favorite way to get started, especially through dropshipping.
1. Dropshipping
Why do we say dropshipping is our top choice? Overall, it is the lowest risk and lowest cost way to get started.
Maybe you have a lot of money to get started on these passive income opportunities, and maybe you don’t. When we were getting started, we didn’t have a ton of money to reinvest into a new business. If you do, that’s perfect — it is going to make your journey a little bit easier. The goal is for you to make everything low-risk and at a low cost to yourself when you get started, especially when it is a new business idea.
Consider these tips:
- DON’T do things that are going to take up a lot of your time.
- DON’T get involved in things that require a lot of upfront money.
- DO start out with something low-cost.
- DON’T spend time sourcing a huge volume of inventory.
For dropshipping, you generally work with overseas suppliers. They ship products on your behalf to your customers. Your job is 100 percent just to market the product. They give you a good price for products, and you charge more to your customers. You take the difference from what your customer pays, making it nearly risk-free. You could start with a couple of hundred bucks.
All the methods you are learning today can be stacked together. To generate real passive income, it works better when your income streams are complementary to each other. You should not completely rely on just one product, supplier, or method. Why? Because if your main one gets cut, all your income streams die. However, you do want them to be complementary. That way, when you are working on one thing, you are impacting the others, as well.
2. Sell Digital Products
Our second favorite way to start generating passive income is selling digital information products. Selling digital products is amazing because you create them once and then sell them over and over and over again.
The profit margins are better than selling physical products. There is a caveat, however, and we are sharing it here since we know some of you will decide to skip the dropshipping. Selling digital products only or by themselves can be very, very difficult. So how do you do it? How do you start?
Here is what we recommend. Let’s say you start a dropshipping business selling fishing equipment. Then you decide to start selling digital products. What you would do is sell digital products to the people that are already buying your physical fishing products. This is a sales technique called upselling.
For example, a customer buys a fishing lure from you. After they make that purchase, they go to your first upsell page with one click. You say, “Hey, do you want to purchase our five-video mastery guide series for tying your own fishing lures?” When they click “yes,” they purchase it with one click and are automatically billed.
The Big Benefit of Digital Products
That digital product — the video series — was created once. Maybe you paid somebody to create it for you or you made it yourself. You have some time invested in it. But every time you sell that video series, it is free money.
If you have a dropshipping business right now, try this. Put together a video course, a high-quality PLR (private label) product, or a PDF product. You can purchase information products from other websites and then resell them under your own label. It’s a great way to resell products and not have people asking for a refund.
The key is over-delivering the information products. With physical products, customers wait to get something in the mail — we call it the Christmas effect. We call a digital product the Amazon effect because they get it right away. Follow these tips:
- DO sell the physical product first.
- DON’T try to sell digital products as the front-end product.
- DO upsell the digital product.
- DO sell a mixture of both to start creating passive income.
3. Affiliate Marketing
Our third favorite way to build passive income is using affiliate marketing. Once you have your dropshipping business going and upselling digital products, it is time to add affiliate marketing. This essentially is where you sell other people’s products and earn a commission. You send them customers, and they handle the fulfillment. They manage all customer service, and you make a commission.
Affiliate marketing is a great business model but remember: you are not building your own business here. You are helping somebody else build theirs. It is important that you build your own customers and your own business. Don’t spend all of your time helping somebody else build their empire. You should even have affiliates for your own business!
Use affiliate marketing to interweave with your business for products that you don’t ever plan to sell. It is an amazing way to boost revenue for your business.
How to Start Affiliate Marketing
Let’s say, for example, that your business is selling supplements like green juices and smoothies. You like selling these products to fitness pros and people that love working out, but you are not interested in creating courses on that topic. The alternative is going to affiliate marketing websites such as Clickbank.com. You can sign up to be an affiliate for video courses, PDFs, and digital products. When your customers purchase the green juice, you refer them to the other company’s video training course (or whatever it is) and earn a commission. But keep these tips in mind:
- DON’T refer your customers to other people’s products that you may sell in the future.
- DON’T refer your customers to affiliated products just for the sake of earning a commission.
- DO refer your customers to products that will benefit your customer, and you have no plans of launching yourself.
- DON’T refer your customers to affiliate products that you would not use.
How to Put Together the Three Income Streams for More Passive Income
A good interweaving of these three business models is the way we recommend setting up your ecommerce business. You are making sales in your dropshipping store, you are selling digital products, and you also have some affiliate marketing products. It makes three income streams created from one single dropshipping product.
Which one of these are you going to implement in your business today? At Ecommerce Empire Builders, we give you all the tools to launch the massive, passive income opportunity you need for 2021! Follow this link to get in on an exclusive, free webinar to learn in detail how to start a passive income business. And remember, your empire starts now!