There are many different ways to make money online, but which ones are actually any good? Today I’m going to look at some of the different broads methods of making money and rating them.
The ratings will be based on how easy it is to get started, the likelihood of making earnings consistently, the costs and difficulties involved and the risks.
A lot of people when they hear make money online, they associate it with affiliate marketing, and with good reason.
Affiliate marketing is a method wear you promote someone else’s products and if someone clicks a special affiliate link and makes a purchase, you get a commission from the sale.
It’s an easy way to get create an online income, as a wide variety of niches have affiliate programs.
Not only that but affiliate marketing can be done in a variety of ways: content marketing via article, videos, social networks and email marketing.
The ease of getting involved, and variety of ways to go about it is tempered by the wide range of skills that are needed to successfully implement an affiliate site. SEO, copywriting, analytics, networking and more are all needed in various amounts to make sure that traffic is flowing and visitors are converting.
The other flaw with affiliate marketing is that you’re at the whim of the affiliate networks: if they shut down or change their terms you could see a sudden drop in earnings, perhaps enough to put you in difficulties.
Even with it’s flaws, affiliate marketing is great for both beginners and experienced online entrepreneurs alike.
Affiliate marketing has been my top pick for beginners to learn how to build a business online for years now. I wrote a guide on how to get started, for free, here.
- Easy to get into
- Can build a sustainable income
- Takes time to learn the nuances
- At the mercy of others
Affiliate marketing rating: 4.5 / 5
Advertisements & sponsorships
Blogging is often associated with affiliate marketing, but some bloggers and authority site owners don’t want to go down that route.
Another way is to use an advertising network and place adverts on your site.
These adverts will earn you money through either the number of impressions (views) or more commonly the number of clicks an advert gets.
The amount of money you make through advertising varies but mostly it’s quite low, a few cents per click, though there are some niches that command higher rewards such as $1 to $5+ a click.
Sponsorship is somewhat similar in that people will pay you to place obviously adverts on your site or for you to promote them in podcasts, videos and articles.
Sponsorships are much harder to obtain that just using an advertising network as your site needs a lot of traffic, and you need to be able to work with the brand to make it a success.
Traffic is really the key element for this method of making money: you need a lot of it (tens of thousands per month at the least) to be able to make a serious income.
That being said, if your site is a side project, using advertisements is an easy, hands off way to making money. With time and commitment it can even make a fairly solid income.
- Hands off
- Requires a lot of traffic
- Difficult to earn a sustainable income
Advertisement/sponsorship rating: 3 / 5
Creating and/or selling a physical product
Perhaps the oldest way to make money both off and online is to sell a physical product. This could be something you’ve created yourself or perhaps it’s something you’ve bought and are selling at a markup (basically like any shop does).
Either way this method of making money has proven itself.
There are some caveats though. First off it takes time, effort and money to produce your own physical product: it’s not for the feint hearted.
The profit margin for physical products is also quite small, until you manage to scale the business.
As well as that you may need to stock inventory which requires space. That plus other costs make your overheads high.
As such you will need to invest start up capital to get going with this method.
The internet does make selling physical products easier though. No longer do you need a brick and mortar shop, but you can stock things in your garage and sell via your website.
- Proven method to making money
- Complex and may require start up capital
- Low margins
- Risky due to inventory
Physical product rating: 2.5 / 5
Creating and selling a digital product
If the complexities of producing and selling a physical product concern you, you should consider a digital product instead.
Digital products can take many forms but the most common ones are ebooks and software.
This method is just as much work as any other, but the main benefits here is profit margin: once you’ve created a product you can sell unlimited copies of it at no further cost. That is except for marketing costs!
While it’s relatively easy to create something, especially an ebook, due to the large quantity of other products out there you will need to stand out both in quality and in your marketing efforts.
Barring a website, your overheads are nil, meaning you can use your time and money into generating leads and traffic to get people to buy your product.
Digital products can also be sold on numerous third party marketplaces (Amazon, App Stores, specific niche software marketplaces etc).
Usually this is at a cost of profit margin as the marketplaces take a cut, but it can cut down marketing costs and reduce the need for you to have your own ecommerce site.
If you take WordPress themes for example, some sellers on ThemeForest have a website, but link all their purchase links to ThemeForest who will handle the actual sale for them.
- Great profit margins
- Relatively easy to get started
- Still requires marketing
- Can be a crowded marketplace
Digital product rating: 4 / 5
Arbitrage & drop shipping
Arbitrage (which drop shipping can be classed under) is the method of buying a service or product for a low price and selling it on for a higher price.
Often you won’t even need to take on inventory in order to sell like this, though it isn’t a guarantee as some wholesaler’s will only sell large numbers of stock in one go.
Drop shipping is an effective method to create an ecommerce store without a lot of the associated risks. Of course there’s still costs involved: you have to buy the products, but the money used to purchase the products comes directly from the purchaser.
- A lot less risk than traditional product sales
- Lower overheads
- No need to handle shipping
- Decent profit margins
- Wholesalers not being able to ship an item
- Any problems are yours to resolve, even if caused by the wholesaler
Arbitrage & drop shipping rating: 4 / 5
Software as a Service (SaaS) is a modern way to sell software. Rather than creating software for a specific platform and selling it for a one of cost, SaaS software is effectively just online and is often sold as a subscription.
An example of this is Adobe and their creative cloud platform. Initially Adobe sold their products (Photoshop etc.) as individual software that you could install on your computer.
They are now slowly changing this so that you now subscribe to their service monthly or yearly and get access to the software online as well as desktop apps.
SaaS products effectively allow businesses to make a recurring income where once they would have had only a single sale every few years.
Setting up a SaaS service is by no means easy – you need to create the tool or pay for it to be created for you and that’s not cheap, time or money wise.
As well as the cost there’s also a risk involved if no one wants your service.
Another possible benefit of going the cloud route is that you no longer need to code for different platforms (Windows, iOS and Linux) – though more and more people are expecting Apple and Android apps!
- Recurring revenue
- Can be platform agnostic
- Costly to create
SaaS rating: 3.5 / 5
Selling a service
If you’ve got skill, sell it! Not everyone has the patience to learn something or indeed the skills or desire to achieve it, so often hire others instead.
Typical skills you can sell are things like writing, coding, and art. You can also sell your experience by becoming a business or life coach.
More and more of the Western world’s economy is becoming service based and the internet has allowed people to expand their client base to anywhere in the world.
Work can be obtained via marketing and word of mouth but there are also numerous marketplaces to sell your skills, from the lower priced Fiverr.com to freelancer sites like Upwork.
- Skills are always needed
- You can set your own prices
- You can easily work on the side
- There’s a lot of competition from people willing to be paid less
- Can be difficult to build up a client base
Selling a skill rating: 4 / 5
We’ve written a lot about binary option on I’ve Tried That, mainly focusing on the problems that people promoting these service cause.
Binary options is a stock trading method where instead of buying and selling stocks for long term trading, you effectively bet on whether the stock price will go up or down in a very short time frame (usually minutes).
While it is possible to make money with binary options, the trading method is very high risk and it’s not unheard of that people actually lose money.
It’s not a method for creating a long term viable business, that’s for sure. In fact I’d suggest that only those with money to burn and a fondness for high risk to even look at binary options.
- It is possible to make money with it
- Very high risk
- Not sustainable business option
Binary options rating: 1 / 5
Network marketing / MLMs
Network marketing is a method of making money by selling products and recruiting people into your team, so any products they sell also make you a commission. If you’ve ever heard of Avon, Mary Kay Cosmetics or Tupperware those are businesses that use the network marketing approach.
Network marketing itself is a viable business plan and a lot of people make good money from it.
Multi-level Marketing (MLM) is another method of making money on and off line and it is closely related to network marketing.
The main issue with MLM is that it can often be subverted to become what is effectively a pyramid scheme.
If the MLM trains you to forego the product and just to recruit more people or there is no product at all, then you need to worry!
Systems that focus on individual recruitment without a product are destined to collapse, taking earnings and your business with it.
More stable network marketing companies that sell products (a la Avon) are definitely a viable way to make money though rarely online (barring marketing).
- Can be a viable business
- A lot of unethical companies online
- Need to have a large team for decent earnings
Network marketing/MLM rating: 2 / 5
Teaching & training
Instead of selling your skills, why not teach them? If you know something well enbough there’s a large market out comprised of people wanting to learn how to do what you do.
This can be literally anything from wriitng, painting, coding, business, woodworking, and so on.
If you can teach your skills via the mediums of writing and video then you can create courses online!
There are two broad ways to go about this: you can either teach direct or teach to the masses. Or of course, both!
Teaching direct can seem from a financial standpoint as the better way as it allows you to charge more, but teaching to the masses allows you to create a course and sell it to as many people as will buy it.
Creating courses might seem difficult but with a WordPress website and a membership plugin it’s very easy to do. There are also plugins specifically for selling online courses.
If you want to take the tech element out of it almost entirely, you can also sell courses via marketplaces like Linda.com.
People will pay reasonable amount for a decent course, and will often pay more if you’re either highly skilled or teach a niche skill.
These courses can be supplemented by direct supervision and supplmental sales (ebooks/books, and even materials.
With your own website you might be able to include affiliate marketing as well, by directing your students to necessary equipment via your affiliate links.
The downsides to this type of method of making money online is the initial workload required – you have to make the course first!
As well as that you’ll likely be requored to aid your students via email or comments in order to both add value for the student and to strengthen your bran and authority and this can be quite time consuming.
- Doing what you love
- Solid mark ups on courses
- A lot of support required
You need to invest time in creating the course, which may or may not sell
Teaching & training rating: 4 / 5
The Bottom Line
This is by no means an exhaustive list and there are many sub categories within each method that can be explored. It’s also a case that 2 or more methods might be combined through necessity or the desire to include more streams of income.
Not every method is suited to everyone and some methods that you hear of online might not even be truly a viable way to make money.
Whichever method you choose, know that hard work and perseverance often pays off