Passive income comes in different flavors, from investments that generate regular payments to small, low-maintenance businesses. What they have in common is that you can earn money without actively working. The idea is that once you’ve laid the foundation, it takes minimal effort to maintain it.
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The challenge is that you have to invest money, time or both to get your income streams going. That may mean purchasing income-producing assets or setting up a passive income business. This article discusses how to create a popular passive income business: a print-on-demand business.
Figures vary, but according to Gelato, the average print-on-demand company makes more than $4,600 per year. Other studies suggest you can earn between $1,000 and $5,000 once you gain traction.
If you make that kind of money, it’s important to use a business bank account to separate your personal and business expenses.Check out our list of the best bank accounts for small businesses to find one that works for you.
Every business that makes money starts with generating ideas. In this case, you need to think about designs and products that people might want to buy. Try to find a theme that suits your own passions and interests. These can be jokes, pets, cartoons, hobbies or even your work.
You can also search for ideas online, see what’s trending on social media, and talk to friends and family. It’s important not to copy other people, but you can rely on what others are selling. Maybe then you’ll find a successful idea and see a way to do it better. Or maybe you can reimagine it to reach an untapped market you know well.
Once you have developed a theme, you can start developing your range. Look at specific products, such as T-shirts, mugs or tote bags, and think about what works best for your market.
With print-on-demand services, your products are only made when someone orders them. That gives you a lot of creative freedom, because you don’t end up with a warehouse full of unsellable items.
Print-on-demand services don’t require a lot of time or money to start with. Still, it’s important to do some groundwork to give your idea the best chance of success. By planning, you can minimize the amount of time you put in and maximize the money you make.
Here are some things to consider:
Map your costs and potential income. Create a budget that includes any start-up and ongoing costs.
Learn more about your customers, especially how broad your customer base can be and how you can reach them.
Compare print-on-demand services to choose the right one for you. Look at quality, prices and service.
Look at the strengths and weaknesses of your competitors. Think about how you can differentiate yourself.
Make sure none of your designs or slogans are copyrighted.
Decide how you’ll sell: you can build your own website or use an existing store.
An understanding of your customers and the wider market will help you build your brand. All the research you do is included in your designs and range.
There are many design tools online that can help you perfect your creations. If you’re not great at designing, include the cost of a freelance designer in your budget.
Once you’ve confirmed your bid, you’re almost ready to go. Before you sell anything to the general public, order samples of your products to view the physical items. This way you can address any quality issues and refine the design as necessary. You can also take photos that you can use in your marketing.
Don’t be afraid to show the products to friends and acquaintances. Their feedback will give you a much better idea of what works (and what doesn’t). If you can get input from your target audience, so much the better.
Online marketplaces like Amazon or Etsy can be a great way to tap into a large existing customer base. However, the fees, such as listing fees, transaction fees and more, will eat into your profits.
Another route is to build your own website. There are some excellent ecommerce solutions that make the process super easy, even if you’re not tech savvy. If you choose this route, be prepared to spend both time and money on marketing and customer service.
Keep in mind that it is not a matter of one or the other. You can start with a hybrid model and as your brand grows, attract customers to your own website.
Print-on-demand services can be an excellent passive business choice for generating revenue. Not only is it easy to get started, but your startup costs will also be low because you only pay when someone orders the product.
The amount you can make depends on what you sell and how you structure your business. Be sure to include any print-on-demand and online market costs in your financial estimates. Set clear financial goals and keep a close eye on your bottom line to maximize your profits.
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We strongly believe in the Golden Rule. Therefore, editorial opinions are ours alone and have not been previously reviewed, approved or endorsed by the included advertisers. The Ascent does not cover all offerings on the market. Editorial content from The Ascent is separate from editorial content from The Motley Fool and is created by a different analyst team. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Emma Newbery has positions at Amazon. The Motley Fool holds and recommends positions in Amazon, Etsy, and Target. The Motley Fool has a disclosure policy.
Build a $4,600 Monthly Passive Income Stream in Less than a Year in 4 Steps was originally published by The Motley Fool
