Contributor: David Brim June 21, 2014
Over the last couple weeks several friends have asked me about ways to make money online. I thought I would take the time to write a post on the topic. I want to mention that all of the ways to make money included in this post are very real. I know because I have personally made money online in all of these ways. I’ve also been directly involved in the development of many internet properties, campaigns, or projects that resulted in making someone, or multiple people money online in these ways.
There are a lot of people making A TON of money online everyday in these ways. I hope that with the help of this post you can be one of them!
Let’s get into it…
1) Online Advertising – Put display or text ads on your website
One of the most simple and straight forward ways to make money online is through your web property by utilizing online advertising. The website eHow is estimated to make $500k per month through Google Adsense, an ad network that puts display ads on your website. If you’d like to be motivated browse the list of the top earners through Google’s ad network.
What it is: Advertisers, or an advertising networks, display ads on your internet property (website, blog, app, game, etc) and you’re compensated. Here’s an example…
How it works: Typically the advertiser will provide an image and link, or snippet of code for you to add on your website. If you’re using an ad network you would place a snippet of code in your desired ad location and the ad network would display relevant ads to your visitors or users.
How compensation works: There are several ways that you can be compensated for ads on your website.
1) Charge a flat rate for the ad placement for a given period of time.
2) Charge based on CPMs (Cost per thousand impressions). CPMs are a common way that ads are charged. Every 1,000 times the ad is shown = one CPM.
So if you’re charging $5 per CPM and your website gets 10,000 page views per month and the brand’s ad shows each time you would charge for 10 CPMS.
(10,000 ad views /1,000 = 10 CPMs)
10 CPMs x $5= $50 / month
If your online property received 150,000 page views per month at a $5 CPM then you would generate $750 per month, or $9,000 per year.
The prices you can be paid per CPM depend on your niche, relevancy to the advertiser, available inventory / demand, etc.
3) Cost Per Click (CPC): Being compensated on a CPC basis is very common. An advertiser’s ad would display on your internet property free of charge and you would be compensated a certain amount each time the ad is clicked.
What you need to get started: A website, blog, online software or tool that attracts website visitors or users.
Suggested steps & resources: If you’re looking to launch and monetize a blog I suggest utilizing WordPress, a popular content management platform that will enable you to publish articles and content easily online. Create good content and share that content with your social circle, or those who would be interested (other bloggers, members of online groups, etc).
If you already have an internet property that generates traffic…congratulations!
I highly suggest that you start your monetization process by applying to Google Adsense. Once you have been been approved for Google adsense you will be able to create various types of ads and will be provided a snippet of code for each ad. Once the code has been added onto your website your website visitors will begin seeing ads on your website and you will be paid for each click.
You will be able to log into your Adsense account and see a report of all the money you’ve earned!
2) Affiliate marketing – Get paid to refer customers to online retailers
Affiliate marketing is a great way to earn money online. I have been, and currently am, an affiliate for a number of advertisers. I have also been on the other side and ran affiliate marketing programs where we paid affiliates for leads or sales.
What it is: Companies agree to pay their affiliates a certain amount of money for a desired action to occur – typically a sale or lead. This is often a great way for a company to generate online sales being that they only incur costs when something of value occurs.
How it works: Many companies that sell online have created affiliate programs. Typically you’ll see a link for affiliates, or an affiliate program in the footer. Amazon, Ebay, Macy’s, PetSmart and many other retailers have affiliate programs. Below you’ll see a screen shot that I took from Target’s website.
Many online retailers utilize affiliate networks to manage their affiliate marketing program. These affiliate networks typically have many advertisers for affiliates to choose from.
Once you have selected what retailer, or product that you would like to promote you will receive a unique link. This link will include your unique affiliate ID.
When someone clicks through your link and makes a purchase you will be compensated a commission for referring the sale. Typically you will get compensated not only for the sale that just occurred, but also any other purchase they make on that website within a certain period of time.
How compensation works: Affiliate commissions, or referral fees vary greatly depending on the retailer, what you are selling, and your history /success with the merchant’s affiliate program.
What you need to get started: Certain affiliate programs restrict the ways that people can promote their links. For example, some Merchants may not want you to use Paid Search (Google Adwords) to promote your landing page with the offer. Others may only accept those who promote their affiliate offers via email, or the web via a blog or value-added website.
Suggested steps & resources: If you do not have a blog, value-added website /online tool, large social circle, strong email list or really understand paid search there would be little you can do to make money through this method. I would suggest starting off by creating a website that people frequent.
If you do have a foundation and are ready to monetize…congrats!
I would suggest by applying to a number of affiliate programs that are relevant to your website or desired niche. You can do this by directly searching for “X retailer name affiliate program” or signing up for a number of affiliate networks.
Some Affiliate Networks I suggest are:
Test various offers and see which convert the best for your audience. Remember to stay true to the mission of your website or brand. Do not promote products that you don’t believe will add value to your website visitors, email list, or social circle.
3) Sponsored posts, conversations and product reviews
Bloggers and social influencers typically have established great trust with their audience or followers over time. An endorsement, review or conversation around a given topic can have great benefits to brands.
What it is: Companies compensate a blogger, or social influencers (Power user on Twitter, Facebook, Instagram, Pinterest, or other social site) to review their product, discuss an issue related to their product (or a problem it solves) or educate their audience about one of their offerings.
How it works: A brand will reach out to an influencer, share the product they are looking to promote and work together to develop a sponsored conversation campaign. There are companies that specifically handle sponsored conversation campaigns. The leading sponsored conversation company is IZEA founded by Ted Murphy. In 2008 and 2009 I worked for IZEA. My role was to build our network of premium influencers. Brands such as Sears, Armani Exchange and many more would come to us to develop a sponsored conversation campaign. I would identify relevant premium influencers that were a good fit for the campaign and reach out to them with details. Many times these campaigns also included some sort of content or give-a-way that was ran on a number of blogs.
How compensation works: Typically an online influencer is paid per post or a flat fee per campaign. In other cases they are paid as an affiliate or a CPC model. If the product is highly relevant to the audience of an influencer they may accept the product as compensation and share an honest review with their audience.
What you need to get started: In order for companies to find enough value to compensate you for a sponsored conversation or product review you need to have a decent sized audience either on your blog or social network. The audience also needs to trust you and you have to have the ability to identify which opportunities, brands and products you should stand behind. Trust is something that takes a long time to build and can be destroyed if you are no longer true to your brand or what is in the best interest of your audience.
Suggested steps & resources: If you have a strong audience on your blog or social network you may want to consider signing up for a network that connects brands with online influencers or creators. I would highly suggest visiting IZEA to learn more.
4) E-commerce: Selling products & services online
Depending on what kind of product that you’re selling, exploring e-commerce could be a very profitable endeavor.
What it is: Selling products online through a website.
How it works: An e-commerce website is created that contains various product. Visitors visit the website and add products to their shopping cart. Once they are ready to check-out they enter their credit card details, or PayPal information, and purchase the products.
On the back-end – the site owner can see the orders that have occurred. If the product is digital, the site would ideally send a unique download link to the purchaser to access their product. If you’re selling a physical item then the site owner, someone on their team or a drop shipper would mail the product to the consumer.
Drop shipping is an arrangement that can be very beneficial for online re-sellers. In this sort of arrangement a re-seller partners with a wholesaler or manufacturing company that agrees to send products that are ordered directly to the end consumer. This saves the online re-seller the need to hold their own inventory, which can be costly.
How compensation works: You make money by selling products over the cost you pay for them and any operating costs you have.
What you need to get started: An e-commerce website, products to sell, drop shipper (optional), payment gateway and merchant account. A payment gateway authorizes credit cards for your e-commerce transactions. A merchant account essentially stores your funds temporarily and transfers it to your bank account.
Suggested steps & resources: Find a good niche. Identify what products you want to sell or create. Products could include online software, e-books, actual books, tangible products, etc. Develop an e-commerce website and add your products. Set-up analytics and test your website’s layout and elements to improve your conversion rate (Percent of visitors that result in a sale).
Side note: I’ve also utilized e-commerce for software as a service (SAAS) ventures. In these types of ventures customers pay a subscription either monthly or annually to access your software tool. The great thing about SAAS ventures, which is also a big negative at times, is that much of the costs are incurred in the development of the venture up front. Once the software is live often times the solution is very scalable and whether 100 or 1,000 people are using the online service there are little additional costs. This equals much higher potential profit margins.
5) Paid directory sites
Niche online directory websites can be a profitable way to make money online.
What it is: A website that lists specific types of companies, events, items or individuals. Charge companies (or whoever you’re listing on your directory) a fee either to be listed, for an upgraded listing or for premium placement.
How it works: Create a website that is highly focused around a topic, industry or geographic location. To help you understand how paid directories work I’ll give you a real example. One paid directory site I own is for University of Central Florida apartments. We listed all of the apartments on the directory for free with basic information: short description, map to location and one picture. We then sell upgraded listings that include more pictures, longer descriptions, video, floor plans and the ability to obtain leads of those interested in scheduling a tour. We also charge apartments to have premium spots on our home page and side-bar.
When utilizing this model you can benefit from all the free listings on the site, which help you gain more organic traffic. You should then ensure that your website is optimized further for SEO (search engine optimization). The more organic traffic you get the more focused visitors you will obtain. The more visitors and page views on your niche directory the more value you will deliver to those willing to pay for upgrades and premium placement.
How compensation works: Compensation is typically a fixed amount annually or monthly. Specific pricing depends on the niche, your traffic and the available supply of premium ad spots on your website.
What you need to get started: A fruitful niche. An online directory, sales collateral and someone to sell.
Suggested steps & resources: Identify a niche that is under served online. High search volume and low competition is ideal. The niche you choose should be one that you know something about. If you’re passionate about it…that’s a plus. I typically utilize and suggest using a customized wordpress based directory. This will make it very easy to update listings and your premium placements.
6) Buy and sell domain names.
Domain names can be very valuable. I have friends that have bought and/or sold domains for six figures. I have sold domains including one for 5 figures. There have been many domain names that have sold for seven figures and even some for 8 figures. The domain Sex.com was previously bought for $13M! If you’d like to get motivated you can review a list of the highest selling domains of all time!
What it is: Buy great domain names at auction or through a domain registrar. Sell it to a private buyer, at auction, or through a domain broker.
How it works: Purchasing a domain names is easy. Finding extremely valuable domain names at a great price is not so easy. Many one and two word domain names are already taken therefore it can be difficult to simply purchase them through a registrar like Godaddy. Similar to real estate purchases – many people would love to acquire high-value domain names at unbelievable prices. However, if it was easy…everyone would be making thousands and in some cases millions of dollars buying and selling domain names.
Negotiating good deals for domains directly with owners is the best way to get domains for a good price.
Selling your domains through a domain broker, at auction, or on a website like Flippa.com are all viable ways to sell your domain.
How compensation works: Buy quality domains as low as possible. Sell them for as high as possible, or build out a niche website that you will monetize in other ways on the valuable domain.
When selling your domain, or websites, I suggest using a third party escrow service. I’ve used Escrow.com in the past and found the service they provide to be valuable. Through Escrow.com you or a buyer set-up a deal and articulate the terms and compensation. The buyer deposits funds into the escrow account. The seller does what is needed to transfer the ownership of the asset. Once the asset has been transferred and confirmation has been made the funds are released to the seller.
What you need to get started: A great domain name that you would be willing to sell. Time to search for and find high quality domain names that are valued at a good price.
Suggested steps & resources: If you’d like to get into buying and selling domain names you can visit domain auctions, browse domains for sale on Flippa.com or contact domain brokers to inquire about their inventory. You may also get lucky once and a while by picking up quality domain names that someone has let expire through registrars like GoDaddy.
7) Get paid for leads or calls generated for a company
Obtaining new prospects, or leads is very valuable for businesses. Working out deals with companies to compensate you based on leads you generate can be a very profitable business endeavor.
What it is: Internet entrepreneurs can get paid for leads they refer to companies. Typically leads are either phone calls or form submissions that meet certain pre-determined qualifications.
How it works: A deal is worked out with a company who agrees to pay a certain bounty for each qualified lead you generate to them. Website traffic is driven to a lead generation website or landing page. A certain percent of those visitors call, or fill out a form. Leads can also be generated via social media, joint registration, or email blasts.
The leads are tracked and each month the company pays you based on the terms agreed upon.
How compensation works: I previously utilized this model with a debt settlement company. We agreed upon $70 per lead for legitimate phone calls over a minute and valid form leads. It ended up costing us about $40 per lead so we made $30 profit for every lead generated. The price you can charge per lead depends on the industry and the deal you put together.
What you need to get started: A lead generation website, meaningful social circle, or large focused email list.
Suggested steps & resources: Speak to a company and see if they would compensate you for leads you refer to them. Build a niche lead generation website with a capture form to gather relevant and mutually agreed upon information. Remember that the more information you ask for the less likely the visitor is to fill out the form. Set-up a phone number that tracks and records the phone calls from your website. Ensure that the company you have an arrangement with is alright with you recording the phone calls before using the call-record feature. We have dealt with certain companies that prefer not to record the calls for legal reasons. Begin driving traffic to the website through social media, search engine optimization, email marketing and online advertising.
Ensure that you’re monitoring your website’s conversion rate and other important metrics. Seek to improve your website based on experiments and data to increase your conversion rate (the amount of visitors that call or fill out a form). This will result in your website generating more leads from the traffic you’re sending. This = more money for you!
I hope that you have found these proven online money making activities to be helpful! There are definitely other ways to make money online such as taking online surveys, online focus groups, etc. I have not done these activities therefore I didn’t want to include them as focal points in this post.
In my next post I will share some common tips to help you make money online no matter which strategy you choose.
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