How your website can earn you a passive income

By | September 17, 2010

Lucy Langdon who works for the Merchant Accounts Forum recently contacted Small Business Tech to write a guest post and I’m very glad she did. This blog post is jam packed full of useful advice for website owners and administrators.


Thank you Lucy and Merchant Accounts Forum for this excellent post. To find out more about how you can also write a guest post for this blog visit here.

A passive income is a source of money that you receive regularly that requires little or no effort past the initial setup. It can be earned from a wide range of sources, for example, rent from a property, royalties from something you’ve produced and patented or advertisements. Creating opportunities to earn passive income is a great way to make your business more resilient and improve your financial security.

This post will look at the different ways your website can be used to earn you a passive income.

1. Advertising
Online advertising is a pretty straightforward idea. Basically, you can ‘rent’ out space to advertisers on your site; the amount you can earn varies but you’ll need to be attracting a fair number of visitors in order to make enough money to make it worthwhile. There are several services that will help you set up advertising on your site- Google Adsense is the most popular and will serve ads that are relevant to the content on your site (which means your visitors are more likely to click and less likely to become annoyed with ads).

2. Affiliate Marketing
In its simplest form, affiliate marketing occurs when one website drives traffic to another. There are lots of different affiliate setups online; it’s a popular area of marketing and can be a good way to earn a passive income. If, for example, your site happens to rank well for a product search term that you don’t actually sell, you can always profit from the traffic by sending it on to an ecommerce site with an affiliate link.

Affiliate marketing is a huge (and growing) are of online commerce and there are many ways you can take advantage of that. A word of warning: if you’re recommending products on your website and linking through to them with an affiliate link, be sure to make it clear that’s what you’re doing. In other words, don’t try and dupe your visitors- their loyalty is worth much more than the small amount you’ll receive when they click on an affiliate link.

3. Downloads
This kind of passive income potentially requires a larger amount of initial resource than the above two strategies, but the chance for greater earning and even lower ongoing effort is more likely. If you take the time to create a quality resource, one that’s in demand, can be used over and over again by different users and isn’t available for free elsewhere, then chances are you’re on to a winner. This resource could be anything from an ebook on a subject you specialise in, to a piece of music you’ve created, or even a useful excel spreadsheet template! Simply optimise a page on your site for the product, get a few testimonials saying how great it is, and set up a quick payment system (Google Checkout does this kind of thing well). The extent to which you market the product is up to you, but, as long as it’s high quality, affordable and unique, chances are it’ll do well over time.

A subset of downloads as passive income is ‘Stock’. Stock files are usually associated with images, but in actual fact can be more or less anything that works to a user’s brief. For example, an audio file of a button clicking might be just as ‘stock-worthy’ as an image of a businessman. The trick here is to find a niche that hasn’t been fulfilled yet and cater to it. A stock library can be added to week on week and year on year- it’s a great way to build up your passive income slowly but steadily.

Remember: although you can use your website to host your downloads and stock files, there are other websites that might do a better job. At a cut of your profit, they will look after the admin side and possibly promote your products to a much wider audience.

4. Donations
If you run a much loved blog, podcast or newsletter but either don’t know how to monetise it or aren’t making enough from your existing efforts, it might well be worthwhile adding a ‘Donate’ button to your sidebar. Internet savvy users understand how valuable a good blog is and may be willing to contribute to its survival. Crucially, this has to be on the subscriber’s terms; don’t try and force the option on anyone, just leave the button there with a quick explanation of why it exists.

5. Merchandise
Another way to make money from a successful blog or online brand is to sell themed merchandise. For example, say you publish a web comic or have a particular catchphrase or logo that your users love, there are plenty of services that will let you create branded novelties (mugs, t-shirts, mousepads etc) to sell from your site.

Each of these forms of passive income can work independently or together and, while some require ongoing upkeep and tweaking, others can be left to grow and prosper with very little input from you. Whichever you choose (and there’s no reason not to choose all of them!), your best option is just to get stuck in!


Lucy Langdon works for Merchant Account Forum, a website that helps visitors find the right merchant account for their business, including UK merchants & international merchants.