Developing a passive online income has been a focus of mine since 2008. That coincided with the Great Recession and a period of time where my primary means of income, my appraisal business, was about to be changed forever.
I am not sure how the idea was first planted in my head. But, I do recall that I decided to try and sell my knowledge about futures trading strategies online in the form of an ebook.
At that point, I had no clue about how to develop a website, so I hired someone local to me to build one for me. Ultimately, I never made a nickel with that particular website.
About six months later, I paid a huge amount of money to attend a week long workshop on how to build an online business. It was hosted in Vancouver, British Columbia by the Internet Marketing Center (IMC). IMC was founded by internet marketing legend Corey Rudl, who has passed away in a car accident just a few years before.
I was hoping to learn how to build my own websites, but instead, IMC’s focus was on developing websites that were nothing more than long form salescopy.
I did learn a bit about using Google to generate traffic, and how to generate organic traffic, and how to write a decent sales page.
My first website developed through the use of IMC’s BeBiz product was focused on day trading stocks.
At one point, after I had learned to generate some decent organic traffic, that website started to provide a small amount of income, that I would regard as about as passive as you can get.
I thought that was the coolest thing in the world!
Unfortunately, Google began to change its search algorithms, and overnight, my site went from the number 1 listing in organic search, to completely off the map. That hurt.
The game was changed forever at that point. Developing passive income online is no longer quite as passive.
What is Passive Online Income?
When I refer to Passive Online Income, I am basically just referring to the idea of generating income through an online business. These days, there is really no such thing as a purely passive income that is generated online.
Internet entrepreneurs really never stop working at their business, which is to generate income online.
A great resource for developing a passive online income may be found at Smart Passive Income, which is run by entrepreneur Pat Flynn.
When you visit that site, you’ll soon discover that there is a lot involved in developing a business online that can produce enough income for you to quit your regular job.
The Most Passive Online Income Business Models
There are literally a million ways to generate income online. Most require a substantial amount of ongoing work. However, there are a few models that, after a while can become quite effective at generating income online with much ADDITIONAL work, once you have the business set up properly.
Affiliate Model
The absolute most passive online income model is the affiliate model. This model simply involves setting up a website and selling someone else’s product.
The most common affiliate type businesses these days revolve around selling products through Amazon. Amazon affiliates make commissions ranging from about 4% to 8%, depending on how well they perform.
Outdoor Gear Lab is an excellent example of a website devoted to selling products through Amazon. As you can see, there are many blog posts, so the effort is ongoing. Since most of the traffic to this website comes from organic search, it takes a while for this type of website to generate significant income.
Information Product Model
This was the model I originally learned at the Internet Marketing Center ten years ago.
The information product model involves creating and marketing your own product on a website. Instead of relying on organic traffic, this model typically uses paid traffic, such as Google Adwords to get visitors to the site.
Other sellers of information products will generate traffic through a consistent effort at branding themselves as the go to expert. Pat Flynn’s Smart Passive Income, which I mentioned earlier, is a perfect example of this type of business model.
Pat brands himself as the go to expert in developing a passive income online through podcasts and speaking engagements, among other tools.
Millionaire Stylist is another example of this type of model. Ricky and Marquetta Breslin have teamed up to create a nice income for themselves by creating products they sell online based upon Marquetta’s knowledge as a stylist. They shoot a lot of video at home and continue to build Marquetta’s brand through Youtube, podcasts and seminars.
The Advertising Model
The last major passive online income model I want to discuss is the advertising model. This model involves building a website that generates a ton of visitors through organic traffic, and then selling ads on that website.
Businesses are always looking for space on the internet to market their products and services. If you have a high traffic website, you can reach out to these businesses and charge them for advertising space on your site.
You can also simply get set up with a CPC network (Cost Per Click) such as Google Adsense. You’ll then get paid each time a visitor to your site clicks on one of the ads on your site.
Keep in mind, however, to generate a good income with this model, you will need to have a lot of traffic. Perezhilton.com is one of the most successful of these websites, along with Huffington Post.
Final thoughts on Passive Online Income
If you checked out any of the examples I mentioned in this post, you’ll probably guess that a lot of work goes into those website businesses, and you’ll have guessed right. That means they really aren’t that passive when it comes to generating income.
However, it is possible to generate income more passively online if you are only interested in just some extra income.
The Kitchen Snob is a great example of a blog that still generates a few hundred dollars per month to the owner, even though she has devoted little energy to it over the last two years.
Deanna’s blog is still able to generate income because it still gets a decent amount of traffic due to the type and quality of the content she used to post regularly, and because she networked a bit with other bloggers.
With this in mind, if you have some knowledge or expertise in an area, there is the possibility that you can generate a nice passive income, after you’ve put in some work.
I will continue to discuss how to generate passive online income in future posts. Thanks for reading!
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