The Top 6 Passive Income Models for Selling Products

One of the simplest and easiest ways to generate passive income is to sell a product online. This is a very simple business model: you simply create a website or a sales page, select a product, sell that product form your sales page and then direct traffic there.

This could be an ebook, a pair of jeans or even a range of different products. The more traffic you can send to your site, the more you will sell. That means you can then start to invest more and more money, to increase and scale your business – or you can repeat the model with multiple different products.

But Wait… How is Selling a Product Passive?

You may be wondering at this point how exactly selling a product can be passive. Most of us are used to selling a product being a rather big upheaval. Normally, selling a product means first designing said product, then marketing it, ensuring it is being manufactured to a high enough standard, promoting the brand perhaps through a website and then sending out units to all your customers (fulfillment). It means an endless process of ordering stock, promoting that stock, packaging and delivering.

Or at least that’s the traditional way of selling products. The good news is that these days, it’s much easier to sell a product than it ever has been before and you actually don’t even need to make your own product to do so.

In the conventional model, selling a product meant one of two things:

  • Creating and manufacturing your own item
  • Buying items in bulk and then selling them off at a lower price point (reselling)

But the options we’re looking at are:

  • Affiliate marketing
  • Selling your own digital product
  • Dropshipping
  • POD
  • Setting up automatically fulfilment and storage

Let’s take a look at each of these ideas in turn…

Affiliate Marketing

Affiliate marketing is an incredibly simple process and one that most people reading this are going to be familiar with.

The idea here is that you are selling products that someone else has created and you are getting commission as a result. This is just like being a door-to-door salesman selling subscriptions to cable TV, except that you don’t have to go door-to-door because you can reach the entire world from the comfort of your chair thanks to the internet!

The other thing that sets affiliate marketing apart from regular commission, is the amount of money you will normally take home. When you’re an affiliate marketer, you can expect to make anything from 50% to 90% commission. Often, this is going to mean selling a digital product like an ebook or a course. This means that the creator has no overhead and thus they can offer very high rates to their marketers. They are happy to do this because the more marketers they can attract, the more they can scale their business – and they’re not losing out on the sales they make themselves.

Selling a digital product like an ebook is a good strategy and especially if you choose the right niche/industry – preferably one that has a great ‘value proposition’ and a universal appeal. Try to sell books that promise to make people’s lives better – whether that means making them fitter, or helping them to make more money. You can then paint a picture of a life where your audience are richer, happier, sexier and healthier than ever before!

The other great thing about selling products as an affiliate is that of course you can usually see how well those items are selling before you choose which one you want to sell yourself. That means you can select something with a pre-established track record and thereby guarantee that you’re likely to make a decent profit from it.

You can find these sorts of products from sites like JVZoo, ClickBank or Commission Junction. They will provide you with an affiliate link and any sales you refer through that link will be credited to your account and earn you money. It’s that simple!

The problem with digital products though is that they don’t have as broad an appeal as physical products. You’ll be able to sell clothes to anyone, whereas only a very specific type of person reads eBooks.

Thus you might prefer to sell physical products, in which case you can use Amazon’s affiliate scheme or ShareASale. Suddenly, you’ll be able to sell everything from CDs, to clothes, to Transformer toys. The downside is that physical products tend to offer a much lower commission at around 4-6% of the RRP (recommended retail price).

You’ll likely sell much more and you’ll have the advantage of selling through stores that people are familiar with (especially in the case of Amazon) but you’ll also have to sell a lot more in order to make the same kind of profit you may be used to.

Whatever the case, selling an affiliate product will always be a way to make money passively as all you need to do is set up an account and then pass on the link!

Digital Products

Of course you can always make your own digital product, which will require no up-front investment and no need for any delivery or storage. Once you’ve made one ebook, you can sell it an infinite number of times and through an automated process with no need to handle anything personally.

This also gives you complete freedom over what you sell specifically and how you want to market and price it. Just keep in mind that of course you’re going to have to create the product yourself and that means you’ll need to invest a little extra time up-front. Or hire someone to create it for you…

Private Label Rights (PLR)

Another way to sell digital products where you get complete control and all of the profit is by using PLR packages.

PLR stands for ‘Private Label Rights’. This is essentially a product that you buy with the sole intention of reselling, but the good news is that all the work will already have been done for you here, which includes not only the creation of the product but also the creation of numerous marketing materials such as sales copy, freebies that you can use to attract attention and more. Some of these will essentially be an entire ready-made sales funnel and this means that all you literally have to do is to copy and paste an existing business model in order to make money!

Dropshipping

Another option is dropshipping. This is essentially somewhere between selling your own physical product and selling an affiliate product.

A dropshipping company is basically any company that will allow you to sell their products and then pass that sale on to them. They will then pay you a cut (typically more than regular affiliate commission for digital products – they essentially act as wholesalers, which means 50/50) and will handle everything from the packaging, to the fulfilment to any complaints they may have from their customers.

The best part? A lot of dropshipping companies are happy to be ‘white label’. This means that they operate like silent partners, never promoting their brand to your end user. You can thereby sell your product online and create the impression that you are working as a regular online store. The company will deliver the product on your behalf but it will look as though it has come from you.

Better yet, some of these companies will even go so far as to allow you to tweak the product or to redesign it. That means that you can have your own logo on it, or even create something entirely new from scratch. A perfect example of this might be selling a supplement: here, the dropshipping company will let you choose the formulation and will let you put your own brand on the pot. From there, you can then sell the product to your audience and they will send it out each time you pass the sale on to them. They’ll never know that you didn’t create it in your very own factory!

In short, this is the perfect way to have your cake and eat it too! Find dropshipping companies through sites like Alibaba.com, or use Google and search for ‘White Label Dropshipping’ in your chosen industry.

Print On Demand (POD)

POD means ‘Print On Demand’ and we’re going to use that term a little loosely. However, the basic idea is that you can sell a product without having to order huge amounts of stock and then hope that you manage to sell them! That’s because POD products get created automatically each time you make a sale and often will get delivered too.

Normally, POD is a term that is used in the publishing industry to describe an alternative to traditional publishing methods. Rather than an author having to find a publisher willing to take a big risk on them by ordering thousands of books and then trying to sell them, POD allows the author to upload their files to a printer and then sell the books directly online. Each time you make a sale, that gets sent to the printing company, the printer automatically prints out and binds the book and that then gets delivered to the buyer.

This means there’s zero risk for anyone involved but you can still sell a physical hard-copy book! Amazon offers this service (which also means you can sell through Amazon itself!) as does Lulu.com and several others. You can also use this method and then order some stock that you send yourself, though this is obviously less passive.

Of course you need to create the book as well but this is just the same as creating the digital product.

POD might normally refer to publishing but the same basic process can apply to many other scenarios. For example, you can use something akin to POD when you use 3D printing. Here, you will upload a 3D STL file or similar to a site like Shapeways and that will then print out your cup holder, your ornament or whatever else you created whenever someone orders it.

You can also use printed t-shirts, or mugs, or caps and can do this through companies like Vistaprint or others that offer ‘custom printing’ or ‘corporate gifts’.

And yes, you can actually make a surprisingly successful business by selling printed shirts!

Automated Reselling

Regular reselling is a very easy business model, even if it is not entirely passive. Usually, this will involve nothing more than choosing the product you want to sell, finding a wholesaler that will provide that product and then order a batch of the item you intend to sell – whether that’s t-shirts, computer games, workout equipment or anything else.

You can keep the investment fairly small to begin with as your business will take time to gain traction. Then, you’ll just order more items each time you sell out. Because you should make around a 50% profit each time you do this, you can invest more money and buy more stock each time you successfully sell all of your items. And that means you can then order more and more each time, growing your business and increasing your profits.

Of course this isn’t passive though because you need to order the items, you need to store them in your home or in a warehouse and then you need to deliver them which will cost you money. But the simple answer to this problem is to either pay a company to handle your storage and delivery (a lot of companies offer these services at scalable rates to suit small businesses) or to hire staff!

There is always a way to generate passive income, so take the above ideas and run with them! Feel free to comment what your favorite passive income generator is below!

I personally use the affiliate marketing business model to make money, and it has been awesome! So much so that I decided to create a free eCourse to show how I do it, called “How To Make $500 In Five Days”. It’s all done using free methods, and is simple to implement. Want to check it out? Click on the button below, and see you on the other side!

 

 

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