How I Make Money Online

When people find out that I make money online, they want to understand how it all works.

I’ve tried several different ways over the years to make money online. I failed with all but one. I’ve also been involved in several small online startups and seen only a few of them succeed. I have some specific thoughts on why one thing fails and another one succeeds but we’ll have to save it for another today. I want to focus on that one thing I did that became a good source of online income.

The Right Approach

Some people get caught in a nasty cycle of looking for the “one true path” of online income, flitting from one approach to the next without any success. And then some people actually do find one approach that works but then start looking for something better. I like what Tomaz from FreedomIdeas.com wrote about this:

Once you know what works [for you], you can just replicate it again and again. The key is to find a system that works [for you] and then master it – instead of trying to figure out 10 different ways of earning money online.

I added the bits in bold and brackets because it is important to realize that there is no single best approach. It’s more about doing something that is a good fit for you. That idea is so important that it deserves the broken record treatment. Find an approach that works for you. Then work the hell out of it. I base most of what I do on the SBI! Action Guide but we won’t get into that level of detail here right now. Bookmark the Action Guide for later.

This approach I’m going to describe isn’t going to appeal to people that lust after venture capital, yearn to change the world or desire to test the capability of their adrenal glands in a volatile start up. Consider this quote from Warren Buffett:

I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.

This approach isn’t about jumping over 7-foot bars. This is about finding a nice broomstick to shuffle over. Leisurely. This is more for people that want to earn money online in a low-key way. Towards the end I’ll tell you what skills or abilities you’ll probably need to succeed with this approach.

Theme-Based Content Sites

I like to build and run theme-based content sites. You might also see them called reference websites or evergreen content sites. Running a theme-based content site is kind of like being in the port-a-potty business: it’s not very sexy but it can be lucrative.

Theme-based content sites are built around a narrowly-defined topic. The information on them is comprehensive, well organized and ideally changes very slowly. Due to the fact that they are comprehensive, it can take a long time to develop all the content. But the good news is that because you’ve picked a topic where the information changes slowly, you aren’t a miserable wretch clapped into the stocks of doing daily website updates. For me, this is ideal. I don’t mind the significant up-front investment as long as I can do it at my own pace. But I don’t want the continual care and feeding of my websites getting out of hand and having any impact on my career or social life.

Like I mentioned above, sites like this require a fair amount of research, planning and work up front. But once they are going strong, it is possible to keep them going with very little effort. I don’t see how you could come much closer to the holy grail of passive income. And sites like this can pay well.

How Much Money Sites Will Make

It’s hard to come up with any definitive numbers. It is going to depend on how large your market is, how big your site is, how many monetization options are available, how well those options pay, how much competition you have and how much traffic you can attract. But I will give two examples I know of that might help you form some idea.

First, keep in mind that for my main site I put in hundreds of hours getting it to where it is today. It’s at the point now where my net income from it would pay all of my living expenses every month. If I wanted to, I could quit my job (but I won’t because I like being a DBA). I’ve put in maybe ten hours of work max over the past three months but my traffic and income continue to grow. That is the strength of a solid theme-based content site.

By comparison, Tomaz from FreedomIdeas.com runs several sites and as of 2007 he was making over $9,000 USD per month. I believe he makes much more now. I think his sites are his sole source of income–no regular 9 to 5 job. And keep and mind that once a site is up and running, he doesn’t have to babysit it 24/7. So he’s constantly faced with the agonizing decision of how to spend all his time: work on his sites to raise his income? travel around the world? play tennis all week? go on a cruise? just relax? You get the idea. Poor guy. It’s a hard life he has carved out but he really has nobody to blame but himself.

How Sites Make the Money

I’m not going to give out too many specific details about my site just yet, so for now we’ll use our imagination and imagine I have a site on solar powered lawnmowers.

There are many monetization strategies available but here are four I use on my own site:

1. Google AdSense Advertising

Jon from Jon Rabbit Lawnmowers signs up with Google AdWords. AdWords allows him to create small advertisements that Google will display along with search results and will also display on certain publishers’ websites. Every time a web surfer clicks on one of his ads, the surfer will go to Jon’s site and Google will charge Jon a small amount of money.

I sign up for Google AdSense. As a website publisher, Google allows me to display advertisements that people have created using AdWords. Google gives me a little piece of code to put on my site to show the ads.

A web surfer comes to my site to read about solar powered lawnmowers. While she’s reading my content, she sees the ad Jon created, served on my site using the AdSense code. When she clicks on that ad and goes to Jon’s site, Google pays me a portion of what they charged Jon.

2. Selling Affiliate Products

Erin’s Lawnmower Belts has a website that sells drive belts directly to consumers. Solar powered lawnmowers burn through drive belts like nobody’s business. They’re are a hot product.

I can sign up on Erin’s website as an affiliate. As her affiliate, I create special links to her products. I use those links on my website. When a surfer is on my site and clicks one of those links, they go to Erin’s website. The links have a tracking code build in so that Erin’s website knows that the surfer came to her site from my site. If the surfer buys one of Erin’s products, I will get a commission from Erin.

3. Selling Leads

These lawnmowers are cutting-edge technology and tend to break down a lot. (They don’t sound like much of a bargain do they?) However, it can be tough to find qualified repair technicians. So somebody has started a site where qualified repair technicians can register themselves. That site allows people that need lawnmower repair to find and contact repair techs in their area. Every time the site sends the repair tech a lead (the contact information for somebody that is looking for a repair tech), the repair tech pays the site for that lead.

I put a little bit of code on my site that allows my users to start the process of finding a repair tech. It is integrated with the other site so that I get paid for sending them the lead.

4. Paid Content

The ACME Solar Powered Lawnmower Company wants me to publish several pages on my site about their lawnmower. I think their product is good and I’m comfortable promoting it. I charge ACME a one time fee or maybe a monthly fee to publish the content they send me.

What it Takes to Do This

At this point you’re probably thinking this sounds like a pretty sweet deal. You’re right. And it’s something almost anybody can do. There may be some technical hurdles involved but they aren’t insurmountable. I’m going to say that if you can use a web browser to get to this site and read it, you probably have all the abilities you need. This is something you can do. It just takes patience and hard work.

Remember above when I told you to bookmark the SBI! Action Guide? Now is a good time to go to it and start learning. You’ll not only learn what to do but you’ll see plenty of examples of successful sites.

SiteSell charges for their SBI! product BUT the Action Guide and most of their best materials are all free. If you think the technical aspects of building a site are more than you can handle, then their SBI! product might be a good fit for you as it takes care of all the technical details. I don’t use their publishing tools but I do pay the yearly fee just to have access to their forums and all the extra resources that only subscribers have access to.