How to Make Passive Income from a Website

165,000 people search for the term ‘passive income’ every month on Google. Odds are, they are looking for a way to increase their overall net value that is more reliable than just saving money from their 9-5. In the world today, you want to make sure your money is working for you, even while you are sleeping. This is passive income at its finest. But what exactly does it mean to make passive income from a website?

Passive income, in short, is where you make money with very little day-to-day effort. One way to do this is by developing or purchasing an already existing online business. The key here is to keep an open mind, to look at your skill set and your financial goals, and to be willing to take a risk on something completely new.

5 passive income streams to generate online

There are many ways to generate income: you could capitalize off royalties on a book you’ve written or a song you’ve produced. You can, of course, invest in the stock market and over time see your dollar gain momentum. Another proven way to make passive income is by owning or operating an online business. There are quite a few online business models that have been proven to be worth the investment, but there are five that often bring in the most success:

Develop a SaaS offering

Are you software savvy? If you are a software developer and are looking for a way to make passive income from a website, you should try creating a SaaS business. A SaaS business is a software offering that is held on the cloud and sold on a subscription basis. SaaS entrepreneurs often find a problem out in the world that their software can solve. Great examples of world-renowned SaaS businesses are Spotify, Netflix and Adobe. You do not need to be a household name to be successful in the SaaS world, either. The most important thing is that you create a product that is user friendly and fills a certain niche that your customer base is looking for. This is exactly what SaaS companies like Txt2Give and ScraperAPI did and found major success.

Make money with affiliate marketing

Have you ever browsed online and stumbled upon a travel blog, only to find yourself clicking on a link to hiking boots and typing in a method of payment? If so, you have already participated in affiliate marketing. Affiliate marketing is a very common way that blog owners make passive income from a website.

Deacon Hayes, from Well Kept Wallet sums affiliate marketing this way: “Many blog owners make money by selling affiliate links on their blogs. This is a great way to earn passive income. Here’s how it works. You link to a product or service on your blog. Then, when someone purchases that product or service through your link, you get paid.”

If you are just starting out, your first step will be to start a blog on WordPress or any other blogging platform. Then, start to create meaningful content that will bring in an audience. Do you have a book of your great-grandmother’s favorite southern recipes that has been passed down from generation to generation? Do you love to cook? Write about it. Share your recipes with the world and become a leader in content on southern cooking. As your blog grows and expands over time, so will your following, opening an opportunity for you to capitalize on affiliate marketing or ad sharing on your website.

Create an online course

Online courses are all the rage right now, as the world continues to expand more and more into the digital age. According to Global News Wire, the “global massive open online courses (MOOC) market is expected to grow by $16.01 billion during 2021-2025. Progressing at a compound annual growth rate (CAGR) of 32% during the forecast period.”

If you have a specific niche or skill that you have been wanting to share with the world, while also making a steady income online, creating an online course might be a good way for you to make passive income from a website. Konrad Hafen, from Open Source Options explains that, “It’s quite easy to generate passive income with online courses. You can start by hosting in an online course marketplace, which takes care of most of the tedious logistics. As your following grows you can transition to other platforms. Being an online instructor gives you freedom to create what you want, the way you want, when you want. If you work hard, online teaching could be the way to get paid for creating what you are passionate about.”

Create an e-commerce website or sell products on Amazon

E-commerce sales skyrocketed over the last year. Now is a great time to join the profitable industry, and what better way to do so than by selling products through FBA (Fulfillment by Amazon). These businesses have proven themselves this last year, especially after the surge in sales during the COVID-19 pandemic.

Also, as one blogger recently noted, “When you need additional income, the banal proposal offered is to get a part-time job. But what if you don’t have the energy and time to put in all those extra hours? This is where Amazon FBA comes into the play. Amazon has become a great source of passive income for people who want to generate extra income for their endeavors.”

Amazon’s platform is user friendly and easily monetizable, but keep in mind that you will need to do a lot of market research to make sure your product would be competitive in the Amazon space, ensuring your ability to make passive income from a website.

Purchase an already existing online business: SaaS, e-commerce or content website

Yes, you can generate passive income online by starting something new, but you can also do so by improving something that already exists. Online businesses that are already established create a great opportunity for someone looking to generate passive income online but who does not want to start a website from scratch.

4 characteristics of a quality online business with passive income potential

If starting an online business is intriguing to you, or the thought of taking one over feels exhilarating, it is good to double check that the business has potential to generate passive income. If the business doesn’t have these four qualities, it is best you learn how to implement them or reconsider if that business is the right fit for you:

Is it easy to navigate and user friendly?

If a site is user friendly, that is a good sign. The more user-friendly (and mobile-friendly) it is, the better. Whenever vetting an online business, make sure that the site is easy to navigate. It should not take your customer ages to find the information they are looking for. Make sure there are very clear call to actions on the site and make sure that you do not clutter your site with information that is not relevant to your audience.

Is it positioned to earn traffic through excellent SEO?

Search engine optimization is one of the most important metrics to keep in mind when looking to buy or start a quality online business. Visibility on Google is key for driving organic traffic to your website. The higher your ranking will be on Google, the more likely you are to create a dynamic customer base.

You can perform a comprehensive SEO audit through online tools available such as Google Analytics, Ahrefs, and Google Search Console.

Does the site exhibit quality customer service and chat options?

Customers should always be your highest priority. Making sure that your website hosts quality customer service and live chat options can make or break your customer retention. Customer retention is one of the most important metrics to always stay aware of. If you do not have happy customers, you will not have a well-oiled profitable machine.

Make sure the website has contact information visible and FAQ pages that can allow for customers to have their questions easily answered. Although it is not always possible to have a live chat where customers can get immediate answers, it is worth looking into for long term success. Remember, the goal isn’t for a customer to never experience a problem on your site or with a product; the goal is to make sure that you deliver excellent customer service so they come back time and time again.

Is the model scalable and are there opportunities for growth?

Make sure that the business you are buying or starting has a model that is scalable. Beware of becoming stagnant in the market. Make sure that there are ample opportunities for growth and that there is a customer base that will find value in your product or content. You will want to do market research here to make sure that the product is still viable for your target audience.

There are many facets to buying an online business and it is important that you perform adequate due diligence, or hire someone to do it for you, before investing in this source of passive income.

Options for purchasing an online business

Creating an app or developing a new online business will take time and will not guarantee success at first. Through hard work early on, you will find great pay off in the end. If waiting for a passive income does not sound appealing to you, you can look into purchasing an already established online business. If you are interested in buying a SaaS, e-commerce or content business, FE has successful businesses of varying size available for sale.

For additional information on the purchase process, visit our process overview, review our buyer FAQs or download our guide to buying an online business.

Basics of monetization for a SaaS or e-commerce website

Monetizing your SaaS business or e-commerce website can be quite straightforward if you get down these three basic principles:

Make sure your app or website is mobile friendly

Due to its mobile-first algorithm, Google will penalize a site if it is not mobile friendly. Why? People spend a significant amount of time on their phones. That is why it is imperative that you create your app or website around this fact: people will more than likely search for you on their mobile device. Moreover, a consumer will do away with an app or website that isn’t compatible with their mobile device. Why? It often feels like a waste of their time.

Keep your customers engaged through social media

Instagram, Facebook and Pinterest can be quite lucrative if you discover how to keep your audience engaged. If you sell products from any of these three platforms, it is imperative that you create a trusting relationship with your followers on social media. Authenticity is key when you are posting on your channel and promoting a product (or yourself) to your audience. Your traffic will only be as good as you are trusted by your following. Trust builds rapport, and customers will want what you are selling (or trust what you are saying) based on how much they believe you are being authentic or have their best interest in mind.

Integrate video

Videos are a great way to keep your audience engaged. The YouTube Partner Program specifically has great monetizing opportunities. By integrating video on your website or app and driving traffic to YouTube, you will be able to make money just by having your video played. At first this will take a lot of work, as you will not gain a YouTube following overnight. Once you have developed content and a substantial number of subscribers, though, you can start making money through features like advertising revenue and channel memberships.

Basics of monetizing your content website

There are many ways to optimize monetization on your content website, but the following have helped people all over the web generate passive income without having to put much work in on the back end:

Affiliate advertising

To monetize a blog with affiliate marketing, there are a few things you must note. Do you know your target audience? The answer to this question is important, because the more relevant your affiliate links are to your audience, the more likely they are to purchase from the site presented to them. To stick with the travel blog example from above, you wouldn’t expect this demographic to purchase a pair of Jimmy Choo’s from your site. Possible? Yes. But it is unlikely they are looking for formal attire while perusing your site on the Himalayan mountain range.

What else will make you successful as an affiliate marketer? Content that has a high value for your audience. Relevance is key here, and your goal should be to help your audience and to retain them.

There are a few ways that affiliate marketers monetize their blog. Physical products, like the hiking boots mentioned above, digital products/services like software subscriptions (think Spotify), or pay-per-lead, where you make money when someone from your audience goes to an affiliate landing page and fills out a form. No product is purchased in this last example.

Monetize your blog with SEO

Having high-performing content drives more traffic to your website and the more people who are on your website, the more money you can make from advertisements.

The key to this? Keep your audience in mind and create content that is meaningful and valuable to them in the long run. Do not skimp on content – you will rank higher on Google with longer form content (think 2,500-3,000 words minimum). You also want to make sure that you have adequate internal and external link structure.

Conclusion

Generating passive income without having to exude much energy is a great goal to work towards, whatever stage you are at in life. Now that you have a clearer picture of the ways you can make passive income from a website, all you must do is decide which avenue is right for you. Whether you decide to create an entirely new online business or plan on purchasing an already-existing business, with the right skill set and determination, the passive income opportunities are plentiful. If you set sail on a new adventure of making passive income through affiliate links on a blog or by demonstrating exceptional SEO on your mobile-friendly app, make sure you do it all with passion and excellence. Proving to your customers along the way that your site, content, product or service will add value to their life will ensure that you are one step closer to generating a passive income stream you can count on.

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