This post was last updated on February 16th, 2021
Looking for an online business definition method that can make you serious money?
I mean really serious income with passive input? When I say passive, it’s true that no business is truly 100% passive, especially in the beginning. In reality, just about any business will require a significant amount of work in the early days.
But it is totally possible to grow an online business into a valuable asset that will snowball and generate significant income.
In this article, I’ll analyse three of the most profitable online businesses and look at the pros and cons of each method.
The Dilemma: Long-term strategy versus short-term earnings (fast money)
My view is that there’s generally too much short-term thinking when we think about growing a business.
We should all be aiming at developing long-term business plans. The latest fad ideas might make fast revenues in the short-time, but they can dry up quickly when tastes change.
Also, the level of personal input required for an online business is a factor. We don’t want another “job” that becomes overly demanding on our time and energy.
We should also look at the time frame required to start making money. How long will it take until I start earning income from my business?
Considering these thoughts, I look at three options below. Of these, course production and dropshipping can give higher income in the short term, while blogging can take longer to earn revenue but can be more passive.
Blogging for Income – Online Business Definition
Most people don’t know that you can make significant income with blogging. It’s also an opportunity that can become extremely passive over time as you step back and outsource content creation to paid writers.
Lots of people start blogs, but there is a high drop-off rate. As you’re unlikely to see significant traffic for some time, it’s easy to become disheartened and give up.
So the upshot is that if you have a personal characteristic of relentlessness, you’ll be rewarded with blogging success. You’ll be required to keep writing even when you feel that you’re not making any progress. Not many people possess this level of drive so not that many blogs actually succeed.
The two main ways that blogs make money are through affiliate marketing and advertising. Both require decent levels of traffic before they start earning reasonable money.
Blogging on WordPress
Getting started with blogging is super-easy. All you need is a domain name and hosting. You can usually get a decent domain name for under $20 at Godaddy. Unless your blog is directed towards your country only, I’d recommend going with a .com domain.
You’ll need a computer network for your website to be stored and delivered from. This service is called hosting. Siteground (which I use and recommend) and Bluehost have great value hosting plans starting at well under $10 per month.
Blogging / Writing on Other Platforms
If you don’t want to start a WordPress blog, there’s a number of other ways that you can make money writing.
Medium is an online writing platform which provides a platform for social journalism. Topics that may have been missed by the mainstream media can be investigated. You can share your perspective. There’s always room for another view on Medium and anyone can join. You don’t even need to prove that you’re a seasoned writer.
As a reader, it costs $5 per month to have unlimited access to articles. When premium readers “clap” for an article, a portion of their monthly fee is paid to the person who wrote the article (you!). If your article is featured on the main page, it has the potential to go viral, and you can make some great money.
Online Course Creation
Online courses are booming right now. Furthermore, the whole online course market is expected to hit $300 billion by 2025 from the current base of around $190 billion. If you’re interested in teaching, the sky really is the limit.
You don’t need much in the way of equipment. Just a computer and a decent microphone and camera will get you started.
There are three main paths that you can go down with courses:
Udemy works on a per-sale basis. Skillshare is similar in that you load your course onto their platform but the difference is that you’re paid per the number of minutes watched rather than courses sold .
Skillshare is like the Netflix of courses. Subscribers pay a fixed fee and in exchange they receive unlimited access to courses. It’s an amazing resource for both students and teachers.
The upside is that you’ll get to keep all of the course sales money, although you’ll need to pay for course hosting fees.
This method works well when you’ve got a very high value niche course. You’ll need to promote your course yourself so it works well if you’ve already got some form of audience. It needs to be remembered that you won’t receive any organic traffic through the hosting platform if using this method.
Self-Host your courses on WordPress
If you want to go all out with your own independence, the best option is to host your course on your own WordPress website. For this you’ll need a WordPress plugin such as Learndash to manage the distribution of your course to students.
All of these resources cost money, so it’s best to draw up a budget and compare your course hosting alternatives.
E-commerce – Online Business Definition
E-commerce involves the selling of goods and services directly to the public. Whilst there are many forms of e-commerce, dropshipping is the easiest way to get started.
Dropshipping is a method that most people use to get started in e-commerce. In its simplest form, it involves buying goods and using your supplier to ship the goods directly from the supplier to the customer. As the dropshipper, you’re effectively the middleman. The main advantage is that you don’t need to physically handle the goods and can be done from anywhere.
It’s the method that can earn you the quickest money in terms of revenue. Getting traffic to your store is the most difficult part. Most people use Facebook, Google advertising or other social media platforms to drive traffic to their store. This can be expensive so it’s best to start out with a small daily budget for Facebook advertising until you become skilled at it. The most popular store platform is Shopify due to its simplicity and vast range of features.
E-commerce can be extremely profitable but it needs to be emphasised that it’s a very hands-on business method. You’ll need to deal with customer service issues if your goods don’t arrive on time or if there are issues with product quality.
The general consensus in the e-commerce community is that dropshipping works best when you have a direct relationship with your supplier. Many have tried dropshipping with marketplaces such as Aliexpress. While this can work, delays with delivery are possible and margins can be extremely low. It’s also very short-term in nature.
So the best method is to sell higher ticket-price items in the range $300 to $1,000 per unit. By doing this, you’ll have a lower quantity of customer service queries and your margins should be higher.
Summary – 3 Most Profitable Options – Online business definition
In this article, we’ve outlined our Online Business definition. We’ve also highlighted three online business methods. My preference is for blogging as it requires less input once it gets going. It’s a fantastic long term opportunity and there are no customer service or facebook advertising issues to deal with.
It will take significant effort in the beginning, but you’ll develop a valuable online asset which should deliver you significant income over the long term.
All of these methods are location-independent, so they are premium lifestyle choices for you.
Here’s a video on 7 Steps to starting an online business that you need less than $300 to launch:
Frequently Asked Questions – Online Business Definition
Should I start my blog on a website builder platform or on self-hosted WordPress?
Start your blog on self-hosted WordPress. Even though there is a slightly steeper learning curve, there are many benefits.
The main benefit of WordPress is that you’ll never be constrained by lack of choice. There’s just so many themes, plug-ins and other integrations available. There are literally thousands of options.
WordPress is the favoured platform of most pro bloggers as it’s infinitely scalable. So even if you start on a web-builder platform, you’ll probably want to move to WordPress later anyway. This migration can be a nightmare for SEO. So why not just start on WordPress?
Can I publish my blog posts on Medium?
Yes, you absolutely can publish your blog post on Medium. Make sure to add a canonical link in medium so that the search engines don’t penalise your SEO for the duplicated content.
Medium also has an import tool which allows you to import your blog post based on its URL.