Online Business Models
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Episode #8 Traveling During the COVID-19 Pandemic You can find this episode by subscribing on your favorite podcast player.You can listen to the podcast either on the YouTube video embedded here, or simply play the audio file below.Resources: Join the Facebook Group...
Episode #7 Affiliate MarketingYou can find this episode by subscribing on your favorite podcast player.You can listen to the podcast either on the YouTube video embedded here, or simply play the audio file below.Resources: Rakuten tourfree.me/rak ...
When you’re young, you’re often asked what you want to be when you grow up.
Most little kids choose things like Fireman or astronaut.
They have no concept of how difficult it is to become an astronaut, or how unfortunately little firemen make.
Now you find yourself embarking on this new online business journey and you have a very similar decision to make.
What do you want to be when you grow up?
Hey! I’m Jason and I’m here to help you on your journey TO your journey! My goal is to help you build a completely mobile income, so you can enjoy a location independent lifestyle.
Today, I wanna talk about how to actually make money on the road. If you’ve listened to the last couple episodes, you’re probably tired of hearing me talk in generalities and woo-woo- mindset stuff.
So, I’m gonna really dig in on this one. This one’s gonna be meaty.
I’m gonna run down all the ways I see as good methods of income generation while on the road. You’ll probably already know from having listened to the previous episode that there will be no “get a job” section. If that’s what you’re looking for, you’re in the wrong place. Not only do I not see that as a secure way to go, it doesn’t require a podcast about it. If that’s the direction you want to go, head over to tourfree.me/fj there are plenty of resources there to help you find gainful remote employment.
What I will be discussing is four income sources and about 7 different ways of how to implement them. Those income sources are product, service, affiliate, and ads.
Just keep in mind that these are the actual income sources and I won’t be necessarily discussing how to implement those income sources and put them to work for you. That’s going to have to wait for another episode. What I’m discussing here is just the revenue sources themselves and how each one works.
Now I know that after listening to my first couple episodes, there were still several people out there who doubted the legitimacy of online business and entrepreneurship. I get it. You’ve been exposed to so many scammers pushing “get rich quick” schemes that making a legitimate living online seems far-fetched.
After all, it’s so far away from what most people are used to. We’ve been taught from an early age that the daily routine of “get up, go to work, get home, go to bed, rinse and repeat” was the only way to earn a living. In fact, many see people who don’t do that as lazy and aren’t bashful about vocalizing that accusation.
My goal with this episode is to help you better understand what the legitimate income opportunities are, how they work, and ways you can implement those strategies. Once you understand some of these tactics and ideas, I hope you might have some ideas on how you can implement them to improve your life. Maybe one of these strategies will speak to you and you will have a better idea of what you can do to create your own freedom.
If any of these topics get too deep for you, don’t worry. I will be doing future episodes diving more in depth into a lot of these strategies.
I don’t want you to get overwhelmed with information. I’m going to try to give you a complete overview of how each business model works without a bunch of clutter that may only serve to muddy the waters right now.
Let’s go ahead and define what the four sources of income are before we discuss different ways of implementing them.
I’m going to start off with a form of revenue that most everyone is familiar with. Ads.
Everyone knows this revenue stream if only for the fact that everyone has been exposed to them. Whether it be print ads in newspapers and magazines, commercials on TV and radio, or even more relevant to the full-time traveler, billboards on the side of the highway, most everyone knows what I mean when I say ads.
Ads on the internet can take on several forms. They can be still pictures on the side of websites, similar to billboards. These are called banner ads.
There are also video ads just like commercials on TV. You see these a lot on YouTube and increasingly on Facebook.
Both of these are logical because they are very similar to the types of ads we have been exposed to our entire life. Later on, when we dig into some of the business models, I’ll throw in a couple ideas that may not be quite so obvious.
Another income stream could be offering a service. This could be bookkeeping, graphic design, audio or video editing, coaching, or any of the numerous services that can be offered remotely. The list is quite literally too long to list.
This is where most of my income originates since I offer online marketing services to businesses.
Offering products is another way to make some money, and this is one of the ones that people are familiar with. This is literally selling products online.
While selling physical products makes sense to most people, something that many people don’t think about is selling digital products. Digital products can take the form of eBooks, apps and software, or even online courses.
All of these are viable digital products that can be sold to make a very nice living online. The nice thing that makes the digital products even more lucrative than the physical ones is that while physical products carry with it a cost of goods sold, for the most part, digital products do not. While it is possible to run out of inventory on physical products, digital products can be infinitely reproduced.
The final type of revenue I’m going to discuss is affiliate revenue. This is perhaps the most difficult type of revenue for some folks to wrap their heads around.
You can basically think of affiliate revenue as a type of ad that you don’t get paid for unless someone buys. Many times, this process is more lucrative for both the advertiser AND the content creator. The reason is while the advertiser doesn’t have to pay until revenue has been generated for them, the commissions are usually bigger than what would come through advertisements, so the content creator (or affiliate as they are called in this case), makes more income if they are able to make sales.
Sales are usually tracked through a unique link that is provided to the affiliate from the vendor. If the customer clicks on this unique link, they are tagged as having come from that specific affiliate. If that customer buys, the affiliate will get credit for that sale.
Some of the confusion sometimes comes from the consumer feeling like the person who referred them is making money, which makes them spend more money. This is simply not the case. It doesn’t cost the consumer any more money.
Let’s look at an example. Amazon is perhaps the most popular affiliate program in the world. The reason for this is that people shop there anyway, so it’s really easy to recommend the customer to buy something from them.
Whether the customer goes to Amazon directly or clicks the affiliate’s link, the price Amazon shows is going to be the same. The only difference is that if the consumer was tagged as coming from the affiliate, the affiliate will get paid a small percentage of the sale as a reward for referring the customer.
The commissions earned can vary greatly. From 1-10% on physical products to 50% or occasionally even more for digital products. And while I used Amazon in this example, it was solely because they are the most well-known. They are definitely not the best program out there. Their commissions were already pretty low, but in the last month or so they have reduced them even further. I no longer recommend the Amazon affiliate program, which they call “Amazon Associates” unless nothing else makes sense. It’s much better to find your product from a different supplier, as long as your audience would receive comparable prices and service from the other supplier.
Now let’s get to looking at the business models you can use to put these revenue streams to work for you!
The first model I want to talk about is blogging. I think blogging is one of the least understood online businesses from the newbie point of view. I talk to so many people who think if they start writing blog articles and posting online, they have a business.
I’ve got bad news for you. Blogging is not a business.
That’s right. Blogging in and of itself is not a business. But there ARE ways of making it one!
Blogging is not a business until you combine it with some, or even all, of the revenue models we discussed earlier. Let’s go over some examples.
One of the first things people tend to gravitate toward when first starting out in blogging is ads. First, they go with an ad network like Google AdSense which pays them a few cents every time someone clicks on an ad.
After they figure out that they need tens of thousands of unique visitors per month to make a decent living from AdSense, they tend to start selling banner ads directly. While this does increase revenue, it doesn’t allow your efforts to realize their full potential.
As proof of that fact, you only have to realize that the people placing ads on your site wouldn’t be doing so if they weren’t making more money by placing the ad than they had to spend on the ad itself. I would submit that you should be the person selling things on your blog instead of selling that right to someone else.
At the very minimum you should be generating affiliate income. This is a great place to start for three reasons:
- First, the products you would be promoting have already been produced by someone else so it’s no extra work on your part.
- Second, if you are promoting relevant products and speaking in a way that makes sense to your audience the sales are going to be much greater than a simple banner ad. That means your revenue will likely be greater as well.
- But probably the biggest reason this is a great place to start is that it can be used in conjunction with all the other methods. So, if you’ve still got some banner ads going, you can simply add on affiliate recommendations on top of that to see how it goes. Since it does fit in well with all the other revenue methods, affiliate income should rarely be phased out, if ever.
But now let’s talk about the real reason you should have a blog: to sell your product or service.
You should have some sort of product or service to offer your audience. In fact, your blog should be the tool you use to gather an audience of folks within your target market.
For instance, you could be selling pet products. This applies to both physical, or digital products. So, you could be selling dog collars or dog training courses.
You would want to create a blog about dogs, obviously. But you don’t have to specifically focus on collars or training. You could write articles on health and nutrition of dogs as well, among a myriad of other topics. Your goal should be to provide your audience with the best content possible on a wide array of topics, while ensuring that your articles are attracting the exact target market for the product that you are selling.
In this example, you wouldn’t want to publish any off-topic articles such as cat care, unless it was something to the effect of “taking care of cats while not neglecting your dogs”, or something like that. Make sure your content is always speaking to the same target audience as your products.
So now, let’s talk about YouTube. The great and powerful YouTube. I see so many people think they can just “start a YouTube channel” and make a living, but it’s way more complicated than that.
Even my son thinks that all he has to do is play video games on YouTube and all his problems will be solved his entire life. So, let’s dive into this one and see how it works.
First, let’s talk about ads. Ad revenue is the income source most commonly associated with YouTube. This is where you put up your video on YouTube, but before someone can watch it, an ad plays. If the person watches the ad, you get a few pennies.
This is basically a revenue sharing program from Google. You produce the content, Google gets paid for displaying an ad on your content, and then shares a small portion of that revenue with you as a reward for creating content people want to watch.
But it’s not an easy program to get in to. There are several requirements, the most difficult of which for a newbie is that you have to have at least 1,000 subscribers. You could have tens of thousands of people watching your videos, but if you don’t have 1,000 subscribers, you’re not getting paid.
My good friend Ryan Bell from the YouTube channel Outdoors Embrace has an awesome channel all about van life. He has been making most, if not all of his income from YouTube. He has done quite well with it.
It is difficult for most people to reach that first 1,000 subscribers, but he was able to do it relatively quickly. I hope to have him on a future podcast episode to discuss exactly what strategies he used to get to that point so quickly.
There are some pretty big dangers in relying on YouTube revenue share as your sole source of income. Ryan’s revenue has dropped significantly since the COVID shutdowns. The average of the past 3 months is only 36% of the average revenue of the prior 10 months.
How would you feel about trying to get by on 1/3 of your current pay?
Heck, I wouldn’t recommend relying on any one source of income that could kick you off their platform at any second, even if you did nothing wrong.
There are plenty of people who get kicked off of platforms including Facebook and YouTube without doing anything wrong and are left to fight to get reinstated.
I know of one person specifically that runs sort of a tech YouTube channel that got booted off the platform this past February. He fought to get it back for months. YouTube finally contacted him last week to say that they investigated and found that he was operating within the terms of service and reinstated his account.
This is a man who lost a YouTube channel with 274k subscribers for no reason at all and was completely without that revenue stream for 4 months. And there’s nothing he can do about it.
I’m not saying that YouTube adshare revenue isn’t a good source of income. It most definitely is. It’s fairly passive and most of the time pretty steady. My problem is that you don’t control it, and I personally don’t like allowing any outside party to have control of a majority of my income.
There are ways to diversify your adshare revenue, though. Most people know to put affiliate links in the description of their videos. Sadly, they seem to be mostly stuck using Amazon links and suffering from a low percentage rate there.
Just like blogging, you can use your YouTube channel as a method of gathering an audience to sell products and services to. In fact, if you do this you may find the products and services to be more profitable than the YouTube adshare. If you hit that point, you may want to think about turning off ads from your channel completely. Leaving them on provides competitors access to the audience you worked hard to build.
Whatever direction you choose to go with your YouTube channel, always, and I mean ALWAYS have other outlets. First and foremost, you need a website. It could be as simple as a blog with your videos embedded on it. The point is, it’s property you own and a way to communicate with your audience.
Secondly, you need an email list. All of your videos should be directing the viewer to your website where hopefully you can get an email address. This will provide a method of communication to your audience should you get cut off.
Using these two strategies the guy with the channel that I told you about that had 274k subscribers and got booted was able to create a new channel and quickly grow it back up to 96k subscribers. While he wasn’t able to get all the way back up to where he was before, it did provide him a good safety net and a head start on a rebuild.
Ecommerce is a great revenue stream. I’ve helped many people get out on the road by teaching them ecommerce. I want to look at a few models within the ecommerce umbrella and discuss the good and bad.
First, let’s define what I mean by ecommerce. The actual real definition may be different, but when I talk about ecommerce, I’m talking about selling physical goods. I’m talking about selling these products via eBay, Amazon, etsy, or even your own website.
As many of you know, I’ve been a big proponent of Amazon FBA for many years. It’s what helped me leave my job and get out on the road. The great advantage of this method is that you can ship all your inventory to Amazon to hold for you in their warehouse until it sells, then they ship it to the customer for you.
There are a couple of drawbacks.
-first, the fees are steep. Between storage fees, commission, shipping fees, etc., you’re gonna be spending more than 1/3 of the sale price on fees in most cases. This can still be profitable; you just have to do more volume to achieve a full-time income. When I started on Amazon back in about 2014, it was relatively easy to find items I could double my money with. Not so much anymore.
– Second, it can be cumbersome to prep shipments to go to Amazon in a small space. Now, I know one of my students who were traveling in a small class B van and they were selling on Amazon. They sent me pictures of them parked in a Lowe’s parking lot with boxes strewn all around. They were processing a shipment right there and it required more space than what they had. You can do it if you’re determined, but it can be difficult. Most of my Amazon students have either given up the business because of space restrictions, or decided to come off the road so they could expand their businesses, and of course neither one of those outcomes are what we are going for here.
-The last thing is that you are selling to Amazon customers. These are not your customers and you don’t have access to them. That means you can’t build a sustainable business of your own. You’ll always be reliant on Amazon, and susceptible to their rules and possible shut downs. As we discussed in the YouTube section earlier, I’m not a big fan of allowing one platform that much control over your business.
Another form of ecommerce that is more tailored to the mobile lifestyle is drop shipping. Drop shipping is basically when you find a supplier of an item that you can buy for a steep discount and sell for full price. When you sell the item, they agree to ship it for you to the customer in unbranded packaging. Some suppliers will even brand the packaging for you for an extra fee.
As I mentioned in the first episode, this was how I got started online back in 2008. I found a supplier of self-defense supplies and built a website to sell those. Once I made a sale, I would go back to my supplier and fill out an order form with the customer’s address for shipping.
It is a great business model for the full-time traveler, but there are a few things you need to be aware of.
First, you’re not getting wholesale pricing, no matter what they tell you. They could make a lot more money selling these items wholesale in bulk and not having to worry about storing the inventory or shipping each individual item to customers. It’s reasonable that since they are providing these extra services that they be paid for it. This will cut into your profit, but the freedom can be worth it.
Also, you need to ensure you can accurately keep track of inventory. This isn’t easily done seeing as you don’t actually have access to the inventory. The best solution here is to have software on your website that integrates directly with your supplier so that when they run out of inventory, it is removed from your website automatically. Only a few suppliers offer any kind of system like this. When I was doing it, that kind of technology didn’t even exist!
Yup. That sucked.
One relatively new form of drop shipping has emerged in the last few years. It is called print on demand, or POD for short. This type of drop shipping is great for creative types. You can design t-shirts, coffee mugs, and a variety of other types of merchandise with your own custom artwork. You make the design and it is printed and shipped only after the customer buys it.
If you are artsy, this is a great model. Not only is it much easier to create your own brand that can attract its own following, but you also won’t have to worry as much about inventory levels. While some POD suppliers have been known to run out of product, it is a pretty rare occurrence.
There is also eBay and etsy. These are great venues to sell your wares, but for obvious reasons, you will be restricted to small items because you will have to hold your own inventory. I do know of people who do great selling things like newspaper and magazine clippings on eBay and small crafts on etsy. The good news is that it’s a lot easier to get access to your customer info on these platforms. You can more easily grow your own list of customers and get them onto your own website so you can save money in commissions and fees.
I hear a lot of people talking about traveling around making money from vending at craft shows. Lemme tell ya, it’s tough. I know. We do it. It’s the main source of income for my wife’s business.
Maybe one day I’ll have her come on here and talk about why she loves it so much, because I don’t. I know she likes the people and the community that surrounds craft shows. I do too, but there are a lot of other things I don’t like.
1-Storing inventory and equipment. For years, we’ve been stuck in a toy hauler because we need the space for inventory, tents, tables, and other assorted equipment. I think we’ve finally found a bunkhouse that we can make work, but we are having to give up other things that are important to us in the name of storage, such as an onboard generator.
You are also at the mercy of show promoters. If they don’t do their job, the crowd doesn’t show up, and there’s nothing you can do about it.
Right now, with the pandemic going on, there are no shows at all which brings the show revenue to a nice round figure of zero.
The best thing about shows is that the customers you are able to obtain are yours. It’s easy to talk them into giving their email address in exchange for a coupon or extra little trinket. Once they are on your list, you can get them on a website to buy from you without having to do a show.
The final models I wanted to talk about kind of go hand-in hand. They are freelancing and virtual assistant. With freelancing, you do work for others, but you aren’t tied down to a particular employer. Someone might contract you to do a job that would only take you a few hours to do. After that, you would move on to a project for another client.
The main difference between these two is relative. A freelancer could have hundreds of clients that they did occasional work for, while a virtual assistant is more committed to their clients. VAs as they are called will either commit a certain number of hours to a client each week, or commit to doing a certain task on an ongoing basis. For that reason, a VA may only have 5 clients, or may even commit all their time to one client full time.
These type businesses can be done through marketplaces such as Fiverr or Upwork, or can be done independently on your own. The best thing about these is the scalability. Once you get enough work, you can actually start outsourcing some of it. Doing it this way could end up growing into your own agency where you no longer do any of the actual work, but act as more of a project manager overseeing your workers.
Both of these are great models with the main drawbacks being that they are very hands-on to get started. You’ll probably be starting off on a marketplace that charges a significant commission and you’ll have to work hard to build a good reputation.
Even though I don’t believe in truly passive income, I do believe in making your income as passive as possible. These two business models won’t be anything resembling passive income until you grow large enough to operate more like an agency and have workers doing your work. It’s a long journey from one point to the other.
In this episode, I’ve tried to give you a good overview of several income generation ideas and my viewpoint on each. I hope it’s obvious by now that I don’t believe in any of these models by themselves. They should all be used in conjunction with others.
If you are freelancing, you should be blogging to grow your target audience and improve your reputation within the community. If you are YouTubing, you should also be selling either physical or digital products.
Also, this is definitely not meant to be portrayed as an all-inclusive list. I did try my best to list a nice selection of business models that I see as the most viable options, but this should still only be seen as an idea generator and not the “end all be all” list of profitable mobile businesses.
Make sure you subscribe to the podcast feed so you don’t miss future episodes where I’ll dive deep into other forms of revenue generation and implementation tactics.
And while you’re there, go ahead and give the podcast a rating and review. Well, assuming it’s a good review, of course. If it’s a bad review, it would be even better if you contacted me directly with your feedback so I can understand what I can change to earn a 5-star review. Just shoot me an email at email@example.com.
If you do leave a review, it will go a long way towards helping other people who need this content find it more easily. And you know, while you’re in your next campground sitting around the fire with your new found friends, let them know about it too! Online business makes for great campfire conversation!
I’m Jason Wyatt, and I’ll see you on the road!