The ability to market your products and services to anyone with a wifi or internet connection is absolutely amazing! The possibilities are seemingly endless and new businesses are being started everyday. In this article we will go over the opportunity you have to BUILD passive income streams using only your phone and laptop.
What is an Internet-Based Business?
Hopefully self explanatory, but this is where you build a business that lives on the internet. Most businesses today have a website even if they have a physical location, but in this day and age a place of business is no longer necessary. The main thing to remember about these businesses is that your job is to provide value that people can access easily using their various devices.
We could split up the opportunities into categories: software, marketplace, and content creation.
Software
This is where you create an application that provides value to users and can be purchased using a device. You’ve seen the millions of mobile “apps” in the iTunes and Google Play stores that people sometimes buy. That’s all software. You may be using Grammarly to write better emails or content, that is software. Salesforce.com is a company that provides software that companies download and pay to use in order to manage their sales funnel.
Software as a service (Saas) is a major industry because most of the cost of creating the product is upfront and can be duplicated and distributed with very low costs. Any additional features may not cost much to add but people will pay more for more features thus increasing your income.
Marketplace
Amazon and Facebook are two very large platforms that have created a place for people to buy and sell goods. You could create a marketplace for niche items that a specific group of customers would be interested in or you could participate in an established market. Some people will partner with different businesses and create listings to sell the businesses products. This is known as drop shipping, you create the ad, and then let the marketplace will show the ad, customers make purchases and if you have it set up correctly, the businesses fulfill the order. You collect a part of the revenue since it was your ad that led to the sale.
Content Creation
Blogs and vlogs, social media sites like Youtube and Twitter, Netflix shows and movies, ebooks and audiobooks, Spotify playlists and podcasts etc. The list could go on and on but hopefully you see the correlation. You produce content, put it out for the world to see, and people will either buy it once, get a subscription, or view it freely with ads.
The idea is that an article, video, ebook, etc. only needs to be created once but people can continue to view it over and over again with very little, if any, cost to reproduce it for the next customer. When you can create something that is more valuable than the cost to produce it, then you can earn a profit. What is nice about this is you can choose to be original and create new content or repurpose and organize older content into something people see as valuable. Either way, you are wanting to gain attention and figure out how to recoup your costs for creating it.
How does this grow my passive income?
By creating an income producing asset that lives on the internet, you open yourself up to variable income and potentially viral income. If you decide to create an ebook, you may do a search for the top googled questions for the year. If it’s on a topic you feel comfortable researching and writing about, you could catch that wave and have it be one of the answers people get. Best of all, you only had to create it once and get a reoccurring stream of income from that one asset.
Just like other assets, the more of them you have, the more money you can make. Let’s play out a scenario using what you now know about online businesses:
You could choose to start a website reviewing and comparing products you really like. As more people visit the site to see what you have to say, you may have a link (also known as an affiliate link) that allows people to either get a discount at the store that sells the product or buy from a digital storefront you created on Amazon.com and get a commission for selling the item. Then you decide to do a video comparing the most searched product on your site and post it to Youtube. If people watch it there, you may get ad revenue as well any commissions from people using the product link you put in the video description.
So let’s review:
- Website Ad Revenue
- Commissions from Affiliate Marketing link
- Youtube Ad Revenue
The list doesn’t have to stop! Now that you have people interested in your content you could start a social media page and create a community for people to talk about the products you’re interested in and sell to them there. Maybe you become a “go-to” for a product category and you decide to write an ebook about how to compare products and reference your website, Youtube channel, and social media sites in the book. You may choose to make the book very cheap so a lot of people can buy it, a new revenue stream, or you make it free and expose a ton of people to all the value you can offer them.
Well, that escalated!
Why do I want this passive income stream?
While your other investments may be at the mercy of the financial markets, online businesses thrive on what people are looking for which may be in line or against what’s happening economically. This is why many people invest in alternative assets such as gold, real estate, peach trees, art, etc. that differ from traditional stock/bond/cash investments. Having a business that you can control, as long as you have a solid wifi connection, can open up a new lifestyle. You may choose to tweak the asset you created from time to time in order to adjust to changing trends so you can stay relevant.
A big reason why this passive income stream may be of most interest is that it costs very little upfront investment. You can host a website, upload videos to Youtube, create an ebook, compile a Spotify playlist, take and upload pictures, create a digital storefront or ad for less than $100. You can choose how much time you want to spend creating and refining your asset. If you are looking for an investment you can start with little to no money, control from almost anywhere in the world, and have many ways to create income then you may want to consider starting an online business.
Risks and Considerations
Different risks exist with online businesses from other investments. There are people in this world who like to steal and an online business can be at risk of being hacked (broken into).
You’ll want to ensure you have appropriate security in place to ensure it is difficult for people to access your sensitive information. You also open yourself up to public criticism. Someone may decide to leave you a bad review or comment. Now that you’ve started a business, it’s possible for someone to have higher expectations than what you can provide and you fail to meet those expectations.
Another consideration, as with most of the BUILD passive income streams, is your time. It may take awhile before the asset you are creating is valuable enough for it to be profitable (income exceeds expenses). How much time a day/week/month do you want to dedicate to this? Typically the goal of passive income is to generate income that you don’t have your time directly tied to like your day job might ($/hr worked). What if you want this income stream but you don’t have time to create all the different aspects? You may consider spending a little money to hire others to assist you in getting it up and running. You could go on to a contractor site like Fiverr and pay for someone else to create or edit an asset for you and then all you do is get it in front of the right audience who will pay for it.
As mentioned previously, there are many ways to make money on the internet. If you love the company you currently work for and don’t have the time, then this may not be the investment for you. There are plenty of other ways to BUY, BORROW, or BUILD passive income!
