The Whole Truth: 7 Ways Bloggers and Other Online Entrepreneurs Make Money

It was 10:30am on a sunny California morning as I gently pulled back the covers and stretched my little toesy-woesies.

“Ahh, another day in paradise.”

I sauntered over to my 13″ aluminum Macbook Pro and shook the trackpad to life. The bouncing Daniel head I use as a screensaver disappeared and I was now on my desktop.

I cracked my knuckles and smiled.

“Let’s see how much moolah I made while I was asleep.”

I logged into Paypal and found…

Ha. Wouldn’t you like to know :)

Let me go ahead and stop you right there.

If you’re like 99% of people who dream of one day starting a business online, it can admittedly be pretty daunting. There’s all this talk about building online businesses…but for the most part, the experts forget to leave out the simple details…and this makes most of the concepts very NEBULOUS at best.

I was talking to my friend Daniela today, who is starting a YouTube channel, and I realized something…

When it’s all said and done, most beginners have the same basic question: “How do I actually make money?”

How is it possible to do/create something in the “imaginary” internet space and have it transform into real money that buys things like groceries?

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Just TWO WEEKS of invoices from my PayPal account. About $9,600. That’s more than I made in FOUR MONTHS at my old restaurant job. How did I make this happen?

Today, I’ll take a minute to break down the exact attitude you need to cultivate before starting an online business — then I’ll show you the simple ways that most online entrepreneurs use to make revenue.

Sound fair?

Let’s go!

FIRST: Check Your Attitude

One of the biggest problems that beginners have when trying to make money online is….THEY’RE TRYING TO MAKE MONEY ONLINE.

I did that and wrote about it in the classic: “Painful, embarrassing shit I’ve done trying to make money online” post. You laughed at me :(

Here’s the problem with that: the Internet is not some faceless, amorphous entity that you can just extract revenue from if you hit it with a pickaxe enough times.

This ain’t the Colorado gold rush, homie.

The Internet isn’t made up of code, or even the computers that create that code.

The Internet is made up of (wait for it…)

PEOPLE.

It’s made up of you.

You, reading this right now.

Without you, there’s no purpose for this blog, or the computer you’re reading it on.

So if you want to make money on the Internet, remember that it’s not actually the Internet making you money.

It’s the PEOPLE reading your work, listening to your voice or watching your show. The Internet is simply the way that you communicate with them.

Most people ask, “How can I make money with this blog/podcast/YouTube channel.”

That’s not the right question. The right question is, “How can I grow an audience of people that love my work, who would eventually consider buying something from me?”

What does this mean?

Two things:

The Internet really isn’t anything special. You can make money the exact same ways online that you can offline. The main advantage of the web is simply volume. For instance, every time I post something on this blog, it’s like speaking to a completely packed, 7,000 person auditorium. Just like IRL (in real life), some people are super engaged, others aren’t. Some people are sleeping in the back. But it’s that scalability that makes an internet platform especially powerful. There’s nothing intrinsically special about the Internet itself.

Your primary focus should be on building an audience first, genuinely helping them, then monetizing later. Without that, nothing matters. Actually building that audience is another post for another day, and there are already many places online to get started.

Here’s a great guide by Neil Patel at Quicksprout that I found useful. I also liked this one from Corbett at Fizzle.co (formally ThinkTraffic).

 

7 Different Methods For Making Money Online

I always chuckle when I explain the first part to people (about how there’s nothing inherently special about working online, and that they should focus on building an audience first….) and they still ask the inevitable, “So how does this make money?”

Well, I guess there’s no use in avoiding the question. So let’s talk about it.

Once you build an audience on any platform (blog, podcast, video, etc) you can create products that they want or provide them with things the’ve already been asking for.

Here are the 7 best methods for making money online.

Method #1: Making information products to help people build a skill or get through a specific sticking point

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Maybe you’re an organic chef that helps people cook healthier meals at a lower cost. Could you make an recipe ebook, or even a video course on preparing healthy meals? If so, your audience might buy it.

Look at what Will and Kyle have done at StartupBros. After realizing that their blog posts on building an importing business were extremely popular, they decided to create a digital course to help people start their own import business.

They were simply filling market demand.

Method #2: Selling physical products that solve a problem or are just plain fun

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Why not open up an eCommerce store or learn how to dropship something? There are plenty of holes in the market waiting to be filled. Neville has a great breakdown of how to create a dropshipping business.

Or you could always MAKE a physical product that you know your audience needs — like Maneesh at Pavlok.

Look at the early rendering of packaging for the device above. Awesome.

 

Method #3: Creating events or experiences

Screen Shot 2014-07-20 at 8.36.03 PM

Why not create a gathering of people and do an activity together?

The seminar model has been around for years in the personal development world, but that’s not the only option for monetizing experiences.

And I often find that these types of products really make you feel the best — both to sell and buy.

For instance, my friends Matt and Jared took their blog Under30CEO and pivoted the business model to build a travel company called Under30Experiences where they take young people on “adult spring break” all over the world. Really cool stuff — and something that’s sorely missing in the market.

Here’s a cool video that explains the trips in detail.

I went to Nicaragua in December and I’m headed to Costa Rica in November. You should join me :)

 

Method #4: Services/Consulting

You are your biggest resource — and people who follow you for all the great free stuff you provide will be happy to learn more from you. Especially if the information you’ve provided them for free in the past has already helped them.

In my Mentorship Program, I help a group of 10 people launch or grow their business. It’s a lot of one-on-one time, but members really appreciate the personal touch.

BTW, if you want updates when I open up the Mentorship Program again, and you’re NOT in the Tribe, go ahead and join.

What knowledge do you have inside your head that people would pay you to tell them? Hint: Most of us have SOMETHING. If you’re currently employed, there’s some piece of knowledge in there that a boss pays you to apply every day. What is it? When I first started my own biz, I realized that college admissions test prep was my untapped knowledge source, and I took my hourly rate from $18 to over $1,000 in some cases.  

 

Method #5: Ads

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As your audience and traffic grows, you can monetize it by placing ads on your platform. Big blogs like Lifehack get SO much traffic that monetizing with ad revenue is a no brainer. It takes a lot of traffic to consistently make money from ads, but they can be part of a comprehensive monetization plan. For instance, vendors like Karmaloop combine products (clothing) with advertisements to generate more revenue. This works on Podcasts and YouTube channels as well. Just like in traditional TV and radio, owners can get paid to run ads for companies that want to access their audience.  

 

Method #6: Affiliate promotions/partnerships

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Don’t have a product to sell? Don’t have a service to offer? Don’t have enough traffic to generate revenue from ads? You can STILL connect your audience with products/services that they need and make a tidy profit. For instance, look at Pat Flynn’s revenue report for May 2014. You’ll see that of all his revenue sources, over $38,000 of the $83,000 he made came from his partnership with Bluehost, a web hosting provider. The deal is simple: Since Pat likes and uses Bluehost for his sites, he recommends it to his audience. If his audience decides to buy the hosting service through the link he provides, Pat gets $65 from Bluehost as a “thank you” for the referral. The person buying the service is not charged anything extra.  

 

Method #7: Hybrid

Screen Shot 2014-07-20 at 8.31.43 PM Once you get one of the above models flowing and you’re able to create consistent, predictable success, it’s much easier to branch out into other revenue streams so that you’re not so dependent on one source. For instance, a lot of YouTubers start by monetizing their videos, then create merchandise and other products for fans. SMOSH is a great example. What started as a comedy duo putting out simple videos on YouTube became a small comedy empire. One look at their site shows monetization from:

  1. Advertisement (Best Buy, Break.com, etc)
  2. Clothing and accessories
  3. Affiliate promotions
  4. Mobile apps
  5. Music
  6. A physical magazine (I saw this at Wal-Mart)
  7. And their original source…video views

 

There’s probably a ton of other stuff going on behind the scenes that I don’t even see right now. Those are just the VISIBLE ways I can see SMOSH making revenue. *******   So those are some of the many possible ways that entrepreneurs makes money online.  What are the big takeaways? First and foremost, remember: There’s really nothing special about making money online. People are doing the same things online that they’ve been doing for years offline. The biggest difference is simply the SCALE at which the business can be done.  Most importantly, remember: Your ability to create revenue from a content platform (such as a blog, Podcast, YouTube channel, etc) is almost entirely dependent on the relationship that you have with your audience.  Build that first. Help people and build that trust. It takes time, so don’t get discouraged. Shit,  look how long it took me.  I should make a detailed post on audience building, shouldn’t I?  I wanted to give you an overview of monetization first, since so many people have questions. I’ll tackle the audience building guide another day.   

What burning questions do you have?

What’s still bugging you about online business? What else do you want to know that I didn’t answer? Leave a comment and I’ll answer it :)     DD   ******* Want weekly insights on building a business you care about and living a happier life? Just join the tribe. (It’s free).    

45 comments
fstyles612
fstyles612

This post was definitely needed. I always thought of starting a blog for money purposes, but I realized that just doing something for the money alone was not something I could consistently do, since there wouldn't be any passion behind it.  So yeah, I agree that it's important to realize that its about the people, the audience. 

JulietAnnerino
JulietAnnerino

Another clear, concise, honest article from the master! Thanks, Daniel, again. your wisdom and eloquence bely your youth! Costa Rica will rock!

Eric_Mac
Eric_Mac

Fantastic post, truly. Copy and pasted message 1 and 3, specifically, focal points that help keep me on track and with a specific clarity. 


#3 works for me in the creative writing world. Talk about experiences to share :)


I'm off to do just that-can't get my 5,000 words in by just responding to freakin' awesome blogs all day, jeesh.



Diana Reid
Diana Reid

Hey Daniel, great post as always. Attitude is critical and the realization that we are actually serving PEOPLE Indstead of just trying to make money online is so important!

Looking forward to the next post :)

Ryan
Ryan

I realized I wanted to create some kind of online business about a year ago. Figuring out exactly what I wanted to do was unbelievably frustrating. I would go sit in the library for 5 hours trying to figure out what I could drop ship... and come up with nothing.


But then I decided to try out the blog writing/audience building approach. And you know why it rocks? Because you write about a subject that you're very interested and try to find people who are absolutely stoked to hear about it. The entire process is a blast. And just having a blog makes you think about everything in terms of creating amazing blog posts.


I'm taking the mentorship class from Daniel and I would absolutely recommend doing a program like this when you get started.


I haven't made a dime yet (started a month ago), but I really think blogging over just drop shipping is the way to go. You really just don't feel like you're working ;)


George
George

I guess for me it's just trying to figure out what I have that's valuable enough that I can make money from it without feeling scammy.  My current skill set doesn't feel like anything special, because I currently get paid $8.37/hr. to implement it.  I've been researching entrepreneurship over the last year or so because I'm sick and tired of earning half of a living wage while still being tens of thousands of dollars in debt (thanks, broken college promises).  I've thought about starting a simple drop-shipping business, but what would I sell?  What am I passionate about enough that I could sell a product online?  How could I compete with big websites?  How would I differentiate myself enough to build a business and turn a profit?  So that gets me thinking about freelance service stuff, like what you've talked about in your "Hacking Elance" article or what Ramit Sethi has pitched with his Earn1K course.  But still, I run into the same problems.  At the end of the day, I just feel like I don't have enough specialized skills or experience to make money as an online entrepreneur, and it's almost depressing that I'm turning 30 in 12 days and I haven't built enough skills to make myself valuable.

Also, completely unrelated, but something I've noticed whenever I come here:  your site has something going on I can't quite figure out that makes my system bog down something fierce.  Sometimes it's so bad that I've thought about unsubscribing from your blog, but I stick through it because your content is valuable.  Still, this lag may be costing you other subscribers who don't have as much patience.

A Ron
A Ron

How do you carry around a 13' macbook? That's like the video board in an arena!



humbirduk
humbirduk

Hi Daniel  That was excellent info .....But  details on how to build a list would be very useful


I would especially like your ideas for getting  experts to contribute to  blog when you are a nobody  ITs often the first part 


which is the hardest ...what cna you offer other than pay them  ?

Justin Tan
Justin Tan

Hey Dan it's really cool how transparent you are with all your own stuff. Unfortunately in today's world where everything is all about NOW, I'm sure a lot of people find it really difficult to build that audience first. My guess is that's why the people who succeed most at making money online aren't actually passionate about making money, but instead are passionate about what they're doing. It's that passion that drives individuals to do stuff that others love, and from there that individual can leverage his passion and the people who love his/her stuff to make money. With that said, have you ever sold something physically online? Would love to get your thoughts on how to sell physical products online

Rich20Something
Rich20Something moderator

@fstyles612 THx Farrah! Sometimes it just takes seeing how OTHERS do it to realize you can do it yourself :)

Rich20Something
Rich20Something moderator

@Ryan Don't stop in here without plugging yourself. Hell, I'll do it for you.


Ryan's site is incredible. It's literally better than mine. I want you use to use that as an endorsement. Get a picture of my face that says "Ryan's site is better than mine" -Daniel DiPiazza.


Everyone, check out DopeStoke and subscribe: http://www.dopestoke.com/

JulietAnnerino
JulietAnnerino

@Ryan I agree! The trick really IS to work at something that doesn't make you feel like you're "working". Notice how they say professional athletes "play" a sport? Musicians "play" their instruments. I think this terminology is used whether they are "professionals" or not because what they are doing is so much fun. But writing about what you believe in and are passionate about, sharing truth, helping others to reach their full potential, like Daniel does here with us can be super-fun, too! Sounds like not only did you make a smart move getting into Daniel's mentorship program, but that he made a smart move choosing to take you on. Best wishes to you ~ go get it!

Justin Tan
Justin Tan

@Ryan Hey Ryan would love to hear more about your blogging experience! I've tried writing before, but could only ever get one good article a month, so I know how frustrating writing can be as well. It's great to see people doing well though, and I wish you all the best with your endeavors!

Justin Tan
Justin Tan

@George Hey George it's tough to hear life isn't going too well right now, but hey things can always change right? Just out of curiousity, what job are you working at now? and what do you like doing during your free time? Maybe there's something there you can work with but just need to look at it from a different perspective!

Rich20Something
Rich20Something moderator

@humbirduk Eventually I should make a post on this..there are a lot of them already out there though.

Justin Tan
Justin Tan

@humbirduk Hey Humbirduk, I know this isn't necessarily the right fit for everybody but I found this article/video by Vincent Nguyen really inspiring. Although I've never done anything similar, I realized personally I love seeing other people being proactive and succeeding. My guess is famous bloggers (like the one in the video) feel the same, and would be willing to help people who will do their utmost to succeed. Here's the link, enjoy!


http://under30ceo.com/dropping-college-beating-27-candidates-landing-dream-job/

Rich20Something
Rich20Something moderator

@Justin Tan Agreed, man. Everybody wants the "NOW." But think about it this way: 2 years ago, you were also looking for a way to get it "NOW" and you've spent the last 2 years looking unsuccessfully. Rather than struggling with schemes and jumping from idea to idea, if you'd just put in the work to build that audience during that time period, you'd already be MUCH closer to where you want to be (or have possibly exceeded it.)


Know what I mean?

JulietAnnerino
JulietAnnerino

@Rich20Something @JulietAnnerino Being a performer (music, writing, directing) I'd have to say that creating experiences appeals to me the most, actually, Daniel!  Seems to me also that "experience" is the one thing that no one can steal, pirate or degrade in any way from a person. I read once a really interesting article about how bands sell CD's not on their web sites, but after concerts, for this reason: people have had such a great "experience" seeing the performance, that they are simply looking for a keepsake in order to relive or re-feel that experience! In the end, they say that all of our valuable "things" (car, clothes, mustache, et el) don't add up to a hill of beans in the value dept. That in fact what us humans will treasure most is our "experiences", our memories and (slightly off-topic) our hopes/dreams. In other words, these intangibles are ironically our most precious possessions. I want to give people this. I'm hoping that my idea for "Grand Gestures" might do that along with my steampunk dystopian future live multi-media show, "The Eccentrics" ...going up in LA Spring '15...  so enough info for you all? ;) Thanks for reading if you got this far! Keep up the great work, everyone! Do what you love and keep loving ~                

Rich20Something
Rich20Something moderator

@JulietAnnerino You're extremely kind! The blog is fun, but a lot of work for sure. I see it like gardening, in a way. Every post I write is a plant I'm tending to, and I'm always pruning the community, responding, perfecting it.

George
George

@Justin Tan 

Well, my current job is working as a caregiver in a group home for mentally handicapped adults.  It seemed pretty great at first, but after being there over 3 years, it's lost its appeal, and the money just plain sucks.  In my free time, I research a good bit about entrepreneurship stuff like this blog and others, as well as researching human behavior and other elements of brain science, since I just find that stuff fascinating.  I've also finally JUST started working towards my dream of being a professional, working musician.  I went to college to major in music composition, but still had a lot of emotional stuff to work through that was so deeply ingrained that it's taken me about a decade after graduating just to figure it all out.  While I always dreamt of making it as a musician/composer, a large part of me never thought I was good enough, so I abandoned that dream throughout all my 20s.

So now, while I don't have room for my piano keyboard to be set up 24/7, I'm forcing myself to take it out and practice at least 30 minutes every day so I can get my skills back up.  I figure I should hopefully be ripe enough in 6 to 12 months from now to start auditioning for some gigs as a jazz pianist on some cruise ships.  But of course, even the best musicians still have to bust ass just to get gigs, and they're never a sure thing, so I've been researching entrepreneurship to have income to fall back on.  I just want to feel safe and secure financially, which I've never felt my entire adult life because I've only ever worked entry-level jobs that barely pay anything and always had this mountain of student loan debt hanging over my head like the Sword of Damocles.  My fiance and I still live with my fiance's parents because of how bad our own financial situation is--because we just don't earn enough money to make it on our own.

I'd love to have my own business, but I don't know how to turn what little skills and knowledge I have into anything viable.  And because I live in a tiny, blue-collar town of about 9,000 people, I'd need to make it an online business for it to be remotely profitable.

Rich20Something
Rich20Something moderator

@Justin Tan Also, physical products are great. Just depends on what you're selling. What's your idea?

Justin Tan
Justin Tan

@George @Justin Tan Hey George I won't lie it definitely seems like a difficult situation to be in, and one that I can't even imagine, but I wanted to say thanks for sharing, it's probably not that easy to say everything you've done here. 


One of the best books I've read (Education of Millionaires by Michael Ellsberg btw) talked about how becoming an entrepreneur isn't a BAM moment, but instead a slow gradual one. In his first chapter, Michael talks about how to really become a "millionaire" (not financially only, but also in your mindset), it's a slow journey, starting from making yourself financially stable, to creating room for experimentation, to concurrently juggle your original work and entrepreneurial activities before finally taking the leap of faith. Basically it's about being an entrepreneur already before quitting your job and declaring yourself as an entrepreneur.


Although obviously I don't know everything about your situation, I think there are a few opportunities here.  As Michael wrote in the book, the first thing you could do is bring back some meaning to your current work (which you seemed to really enjoy originally), and I think one way to do so would be to volunteer your musical talents to play in front of your patients. I know it's not glamorous, but I think there are many benefits to this. First off, it would build your confidence. There probably wouldn't be much expectation for you to perform well, but giving a few successful performances in front of an audience means building a chain of small wins, and you can use these small wins and the confidence gained to take greater risks and do better things. At the same time, if there are any visitors (family/friends of patients), they too will be exposed to your talents, and will appreciate your gesture to their loved ones. The beauty of a small community is word travels fast, and if you do well at the group home, you might be invited elsewhere to play within the town. From there you would have a side gig, alongside your current job, where you can earn money, and on top of that, you would be an authority within the town, and if you'd like, could tutor other people to learn to play the keyboard. 


From there the opportunities are boundless. You could start a youtube channel that would have a good audience (people within your town) that could get exposure online. You could start a blog that teaches beginning keyboard/composing skills, and create information products from there. You could get references from friends to perform at places beyond your small town and begin to build a bigger reputation. There's a lot of potential here, but I think the important thing for you is to start NOW. Obviously practice a good amount every day, but volunteer yourself to play any time, anywhere. Get that exposure, make mistakes, become a better performer, and build that reputation within your town. I might not know you well, but if you can start performing NOW, I have faith you'll do well for yourself George!!

Justin Tan
Justin Tan

@Rich20Something Ive been selling customized sports uniforms (mostly soccer) to my customers (Guam, Northern Marianas Islands, Hong Kong) for the last 3 years. Unfortunately the factory I'm using will shut down, so I'm looking at different ways to operate. I've found a factory that can produce high quality low cost dry fit shirts in the Philippines, and will likely be focusing on selling these shirts on Guam and Northern Marianas Islands. These dry fit shirts are ideal for logo printing and so it's an ideal product for Guam/NMI because they love t-shirts (charity walks, marathons, many sports teams etc. every month). What more, by putting stocking the shirts locally, I can turn around product a lot faster than many other competitors. One of my weaknesses though has always been reaching out to people whom I dont have a relationship to. I imagine you do that a lot given you blog, but do you have any advice on that?


George
George

@Justin Tan Those are some decent ideas, but it still feels really small-scale, and I'm trying to find a way to get to financial freedom ASAP, given how long I've felt trapped in my own financial situation, and the bottom line is that this town is simply not conducive to a good way out.

I don't really feel keen on teaching, but even if I DID create some online products aimed at teaching others how to perform or compose, I really have no clue how I'd differentiate myself given that there are already SO many similar products on the market already.

Performing locally COULD work to an extent, though I currently work second shift, so that limits a lot of possibilities for me (like gigging at local bars or something).  Moreover, I still don't have my driver's license yet, and when I DO get it, I still can't afford my own car on what I earn, so I wouldn't have a way to transport my keyboard until I figure that out.  And even still, I would need to learn the market here for what kind of music they want to hear, which may or may not mesh with the kind of music I want to perform.

I have two YouTube channels currently--one for my vocal covers of songs from musicals, and one for my original compositions and piano covers--neither of which I'm really marketing or actively building, though I suppose I could work on that more.  Lately, I've just treated it as a passing hobby.

JulietAnnerino
JulietAnnerino

@Justin Tan @Rich20Something Wow, Justin, you  are a very smart dude. Sounds like you know your biz very well! Who are the people you want to reach who you don't have a relationship with? Are you wondering how to reach a wider customer base? Do you advertise? do you check out your competition to see how they are reaching new customers? Always great to learn form others in fields related to yours, then combine all your research to do it all better than they are ;) Best wishes to you and your endeavors. Keep up the great work!

Justin Tan
Justin Tan

@Rich20Something @Justin Tan Yea my guess is content really isn't my thing. I'm quite proud that I even got 5 articles out, but there really was too much effort for what eventually came out. Maybe sometime in the future though it would be interesting to come back too....

Justin Tan
Justin Tan

@George @Justin Tan Hey it's all about starting somewhere, failing, starting again, failing, keeping strong until you succeed right? 

Justin Tan
Justin Tan

@JulietAnnerino @Justin Tan @Rich20Something Haha luckily I have family members who also been in the garment business and lived in the area so I can always gain knowledge from them. Good examples would be schools, marathon sponsors (Bank of Guam sponsors a run for example) etc. I don't advertise because I'm not reaching the end consumer, rather a person who then distributes shirts to those end consumers. On guam/NMI, a lot of my competition reach their customers through references/being family/friends. thanks for all your sypport!

George
George

@Rich20Something @Justin Tan My vocal channel doesn't have much there yet, but I recommend this video above the other three:  https://www.youtube.com/watch?v=03h1yUFQwlw

My piano channel...apparently doesn't have much up on there, either.  I really need to get more of my music up there.  Like I said, it's been more of a passing hobby than something I've been actively working towards building, but I should probably change that.  Anyways, you can see it here:  https://www.youtube.com/user/PianoManGidley/videos

Justin Tan
Justin Tan

@George @Rich20Something @Justin Tan Hey George, even if it isn't a lot, it sounds like you have some really cool stuff up there. Daniel would know better, but it does seem like getting that audience going would be your best course of action if you want to take the online option.


Of course don't forget, being in a community of 9000 can also have it's benefits. It does mean there's naturally less competition for whatever you end up choosing to do. Unfortunately it's hard to get everything set up perfectly the first time, but if a few compromises can be reached with yourself(playing different kinds of music, teaching etc.), then you can really start your entrepreneurial journey, and who knows where that will take you?