Best Passive Income Guide: 9 Steps to Profitable Website
In this day and age, people have realized that they could create passive income opportunities on the Internet. I am talking about having a niche website that generates thousands or even tens of thousands dollars a month.
Before you say it’s impossible to do, let me assure you: it’s possible for anyone to have a profitable website that could potentially replace your regular income.
This guide will show you step-by-step how to create your own money-generating website even if you have little or no experience in web development before.
There are so many examples of successful niche websites or blogs on the internet, but here are some very good examples of websites that are generating a lot of income for their owners.
Passive Income Site Examples
Monetization: Paid membership, affiliate marketing, branded merchandise, podcast
Monthly Traffic: 33,500
Traffic Value: $20.9K
Monetization: Affiliate marketing
Monthly Traffic: 128,000
Traffic Value: $314K
Niche: Survival for moms
Monetization: Books sales, affiliate marketing, podcast
Monthly Traffic: 17,300
Traffic Value: $16.2K
Niche: Swimming Pool
Monetization: Affiliate marketing
Monthly Traffic: 227,000
Traffic Value: $301K
Niche: Men’s Grooming
Monetization: Affiliate marketing
Monthly Traffic: 927,000
Traffic Value: $925K
Monetization: Affiliate marketing, paid plugins
Monthly Traffic: 1,300,000
Traffic Value: $4.3M
Niche: Paleo Diet
Monetization: Cookbook recipes, monthly membership, affiliate marketing
Monthly Traffic: 266,000
Traffic Value: $224K
Niche: Puppy training
Monetization: Affiliate marketing
Monthly Traffic: 266,000
Traffic Value: $224K
Niche: Self Improvement
Monetization: Affiliate marketing
Monthly Traffic: 179,000
Traffic Value: $125K
Monetization Methods: Paid ads, sponsored posts, affiliate marketing
Monthly Traffic: 67,800
Traffic Value: $85.3K
Step 1: Choose your niche
Choosing a niche is the very first step you must take to create your passive income website. Make sure you check if there are products and services being sold in that niche.
A simple way to check a niche if it’s profitable or not is by going to e-commerce sites like Amazon or Ebay.
If you see plenty of companies selling products and services then most likely it’s a good niche to go after.
To investigate the niche further, go to Google.com and search for the niche. If there are advertisers paying for ads, then it’s most likely a profitable niche.
The next step is what most people miss. In addition to having lots of affiliate products, services, and ads, it’s also important for a niche to have plenty of big sites and small sites that make money.
Here’s an example. Let’s say we’re analyzing if camping is a good niche or not. In the first screenshot, you see a lot of Google ads and affiliate products. There are also a lot of big camping sites like:
and much more. Usually, finding big and authoritative websites in your niche is not going to be difficult. If you can’t find a lot of big websites in a niche, it doesn’t mean the niche is bad. However, you have to make sure there are plenty of small websites that are making money, which bring us to the next point: Find Small Websites that Make Money
Like this one:
or this one:
Finding both big websites and small websites that make money is an important step that most people don’t know about. In step 3, you’ll learn why this is important.
Ideally, the niche topic you choose should be something you like or you will not get very far.
The reason is because you must write high-quality content around the topic. Most people agree, this is the hardest part of content marketing or blogging.
It’s going to be very hard for you to write content on consistent basis if you don’t enjoy the topic of your website.
Having said that, you can always hire expert writers to write for your blog. I leave it up to you to decide which route you want to go.
All professional bloggers write most of their content. However, niche website owners can definitely outsource their content work to someone else.
The key is always to create consistent high-quality content for your niche readers.
Important notes when choosing a niche:
Check for niche products or services on Google
Check for niche ads and affiliate products
Find big websites and small websites that are making money
Choose to write the content yourself or outsource to a ghost writer
Step 2: Know your buyer persona
After you decide what niche you want to go into, the next step is to create a buyer persona.
A buyer persona is a representation of your ideal target market based on research and knowledge you have regarding your niche.
This is why starting a website in a niche that you are familiar with is easier because you can create the perfect buyer persona for your website.
Creating a buyer persona is one of the most important things to do when you start researching on ideal topics for your passive income website. By knowing your buyer persona, you’re able to identify their specific needs, wants, and interests.
Unlike offline business model that relies on word-of-mouth or referrals, a passive income website uses an “inbound marketing” model. That means your customers are the ones who are looking for information to solve their problems.
This is completely different than an “outbound marketing” model where salespeople or marketers who solicit the first contact with the leads.
Inbound marketing can only be successful if you know your buyer persona because it involves creating valuable content that are specifically written to solve your buyer persona’s problems.
Here are some useful guides to help you create the perfect buyer persona:
Step 3: Keyword Research
Now comes the fun part. It’s keyword research time. As you know from the screenshots I share, I use Ahrefs to do all of my SEO research.
In step 1, we’ve discovered several big websites and also several small websites that are making money. The reason why you need a list of both big and small websites is because you need their keywords.
Big websites are great to discover popular topics that you can write and get a lot of backlinks for. The idea is called a “Skyscraper Technique” and here’s how it works:
- find a popular guide post in your niche
- re-write the guide and make it better
- email everyone who links to the first guide and tell them to link to your guide too
The goal for these big websites keywords is not to rank them, but to create the best guides possible to attract many high-quality backlinks.
Additionally, we need small websites to discover “money keywords” that they rank for. Since small websites are comparable to your new niche website, that means most keywords that they have are easy targets.
You can easily find profitable keywords that a website ranks for using Ahrefs:
Step 4: Choose your Unique Mechanism
This step is very important. People seems to have overlooked one important fact that you need a Unique Mechanism to be different than everyone else.
This term is also often called Unique Selling Proposition or USP. It is very important for your readers to see you as unique, otherwise they will relegate you to commodity status.
A great example in real life is how P90X make millions of dollar by using a Unique Mechanism for their product. They claim their exercise method is designed to avoid the “plateau effect” that body builders are having problems with.
They even create a name for their Unique Mechanism: muscle confusion. Here is a page on their website that explains exactly what muscle confusion is.
Before having this Unique Mechanism, the company was struggling to sell their video training materials. However, sales went through the roof after they implemented a Unique Mechanism in their message.
Note: Changing your routine every week to prevent plateaus from occurring and to keep your muscles continually growing is not new in fitness world. P90X just invented a name for it.
Step 5: Develop your website
After you decide what your Unique Mechanism is, now is time to develop your website. I recommend building your website using WordPress because it is fairly easy to use even for beginner webmasters.
In addition, WordPress is an open source platform that is used by millions of websites on the Internet. That means you will find WordPress experts everywhere when you have issues.
Make sure you choose a good WordPress theme that is lightweight so your website loads quickly.
There are a lot of guides available on the Internet about making a website, but here’s our step-by-step guide on how to create your own website using WordPress
Step 6: Create your content marketing plan
Your content marketing plan is something that is very important to think about when starting a new niche website. According to HubSpot, companies that published 16+ articles a month get almost 3.5X the traffic than companies that only publish 0-4 times a month.
Here are some questions you need to answer while crafting your content marketing plan:
What is your objective?
Well, this is an obvious one. You must know what you are trying to gain from your content marketing. Do you want more SEO traffic? more sign ups? more backlinks? Decide what your objective is so you can focus on getting it done.
What does a conversion mean to you?
Your goal is to execute a content marketing to get a conversion. What does conversion mean to you? Does it mean email sign ups? more sales? webinar attendance? Make sure you understand what conversion means to you so you can improve your conversion rate.
Who do you want to reach?
You have done this process in step 2: Know your buyer persona. At this stage, you should know your niche target market very well. What’s their day to day activities look like? What are their goals? What are their problems? What questions do they have? etc.
Where can you find them?
Figure out where your target markets hang out. Most likely they are on social media sites like Facebook, Twitter, LinkedIn, YouTube, and so on.
What will you say?
You should already figure this out if you do step 3: Keyword research. In step 3, you have observed what kind of content your competitions have. Your goal is to make your content better.
At Formal Site, we have the habit of grouping keywords into 5 categories:
- Problem keywords
- Solution keywords
- Question keywords
- Comparison keywords
- Conversion keywords
How will you reach them?
There are several ways to reach your target audience. This includes sharing your content on social media, reaching out to other bloggers, and optimizing your content for search engines. Creating and promoting your content should be the focus of your content marketing plan.
How are you doing?
Try the best you can to monitor and measure your Return on Investment of your content marketing effort. Here’s a good resource on how to do it.
Step 7: Choose how to monetize your website
After you have come up with your own content marketing plan, it is time to think about how you want to monetize your website. There are several options to choose from.
Utilize Affiliate Marketing
Affiliate marketing is one of the easiest ways to start making money online. The basic idea is, you place your personal link of a product on your website, and when people click that link and purchase, you will get a commission.
There are many places where you can search for products and services you can sell as an affiliate. One of the biggest companies you can work for is Amazon. They have millions of products you can list and get commission from.
Affiliate marketing is pervasive on the Internet. It means you can easily find a company that is willing to pay you as an affiliate. All you have to do is search on Google using appropriate keywords like “niche + affiliate”
Publish AdSense and Other Ad Displays
Another way to earn passive income is to display AdSense and other ads throughout your website. You can earn money by ad impressions or by clicks.
The more visitors you have the more money you could generate from your website.
Sell Your Own Product or Service
One of the most effective ways to earn passive income using your niche website is to sell your own product or service. Why you ask?
It has the highest profit potential – not only can you profit from the frontend (initial) sales, you can also profit from the backend sales (sell more of your product or service).
You have full control of everything from product creation to delivery to marketing to sales to customer service. This is the ultimate freedom that business owners enjoy.
You can sell physical products such as t-shirts, handmade jewelries, pet products, beauty products, and more. You can sell online products such as ebooks and online courses. And lastly, you can sell services such as content writing, expert consulting, and more.
Charge Monthly or Yearly Subscription
Subscription-based income is one of the better types of passive income because it is somewhat more secure, predictable, and dependable.
Aside from packaging your own product for a monthly or yearly subscription, you can also charge small businesses to get listed on your website.
An example of this would be a directory type of website where you list local businesses and place a link to their website. Why would small businesses pay for the listing?
If you optimize your website well, meaning it ranks high on search engines, small business owners will contact you just for the fact that they want to get a link from your site.
Backlinks are important for search engine rankings, especially a very related backlink from a niche website. There are many examples of websites that use this type of revenue.
Site examples that use subscription based monetization method:
Top Rated Local (Local Business Directory)
Peaceful Parent (Parenting)
Farm Fresh for Life (Homesteading)
Conjuror Community (Magic)
Do Lead Generation
If you decide to create a brand new or add a directory site to an existing one, you might not get business owners who want to pay right away. Remember, your SEO must be top-notch before people will attempt to contact you.
If you decide to start a lead generation website, you must strategically place a contact form to capture leads for businesses in your niche and advertise it using paid ads.
For example, if you create a niche website about backyard contractors, you can use Facebook or Google ads to generate leads and then you can sell the leads to pool builders, landscapers, outdoor lighting vendors, patio/deck builders, you get the idea.
Accept Sponsored Post
While you are working on your SEO to improve your domain authority score, you could make passive income by accepting guest post or sponsored post.
The idea is you might get an email from another website owner who want to be featured on your blog. Usually, they will send you an article for you to publish on your site.
The article will contain a backlink to their site. This is the value they want from you. If your website is attractive enough, they are willing to pay for publishing their article.
It is a win-win for both parties because you get paid and high-quality content. The other blogger gets a backlink they want.
Keep in mind to always work with high-quality websites and content. You do not want to associate your website with other spammy websites and content.
Step 8: SEO
The next step is to work on both your on-site SEO and off-site SEO. You see, if you really want to enjoy the benefits of earning passive income from a website, your web pages must rank high on search engines.
The higher your ranking the more traffic you get to your website. Whether you’re monetizing your website using ads, promoting affiliate products, or selling your own courses, you need traffic to make money.
Additionally, if you choose to monetize your passive income website using sponsored post, your website’s exposure is what valuable for other webmasters and business owners. Your job is to make it so valuable that they are willing to pay to be featured on your website.
Fortunately, we’ve done half the work by identifying our big and small competitions (in step 1) and also their keywords (in step 3). Now is time to optimize your website using those keywords.
Here’s a step-by-step guide on how to rank your website on first page of Google.
In addition to the step-by-step guide above, you also need to build backlinks to your website. There are two strategies that I like to use when building backlinks to a new website:
– Skyscraper technique (write guides and email other webmasters to include our useful guides on their blogs)
– Guest posting
The skyscraper technique is a great method to get backlinks to your guides and guest posting technique is a great method to get links to your “money pages.”
Remember in step 3, we have keywords from big sites and small sites? Skyscraper technique is for getting links to your big sites keywords and guest posting technique is for getting links to your small sites keywords.
The reason is because no one really likes to link to your “money pages” when you approach them using the skyscraper technique.
With guest posting, you’re sending a high quality article to your host website so you can control what page you want to link from the article.
Important notes when working on your SEO:
Big websites keywords are not for ranking. They are for attracting as many backlinks as possible.
Use “Skyscraper Technique” to generate links to your big keywords
Small websites keywords are “money keywords.” These keywords are usually easy to rank.
Use “Guest Posting” technique to generate links to your money keywords.
Step 9: Social Media
One thing you can’t ignore is the popularity of social media in our everyday life. A lot of people are active social media users, so you must share your content on social media as well.
The key is to be in front of your niche market as often as possible. Here’s a challenge for you: Create a social media content calendar to make sure followers and fans hear from you at least once a week.
How about twice a week? Think about what it can do to your business if your entire network hears from you consistently several times a week?
With today’s technology, there is no excuse to NOT be heard at least several times a week. Make sure you capture email addresses so you can contact your readers again and again. Additionally, always try to be helpful on social media sites like Facebook, Twitter, YouTube, and other websites to gain fans and followers.
You should also check all of the big brands’ social media accounts to see what type of content they share so you can share similar type of content to your readers.
Schedule Your Social Media Posts Using Hootsuite or Buffer
Sharing your content on social media websites like Facebook, Twitter, or Instagram doesn’t have to be a difficult task. You can use free applications such as Hootsuite or Buffer to schedule your content so you only have to set it once or twice a month in order to save time.
Share your free downloads on Social Media
If you think it’s impossible for you to create a profitable website that generate a lot of money, think again! There are billions of people on the internet who are looking for answers to their problems. Every problem that you solve is a potential money maker.
The key is to make your website one of the more useful websites on the Internet for a niche. Remember, there are always competitions in any niche or industry.
The good thing about creating a passive income website is you create most of your online assets once but they are online forever. For example, if you write an article or shoot an online video, your visitors will be able to consume it forever.