Online Passive Income: It’s Not As Passive As You Think

General life stress is best relieved when financial stresses are first taken care of. That is one of the reasons many individuals who may not be overly-compensated in their jobs seek for additional income from passive means, including side hustles. Side hustles often include passive income opportunities in multi-level marketing schemes, real estate or online businesses.

But, achieving passive income success, whether in real estate or online, is not accomplished overnight. Success in any venture often takes years of work, including the patience and fortitude to stick with it. Any salesman touting the ability to get to a passive online business in a short period is typically doing so with their own short term revenue in mind.

Online passive business owner

If you are willing to invest your time or other resources to build a passive business online, you should set your expectations for the amount of time it will take to eventually make your passive side hustle a profitable venture.

Having built multiple, small and large online side hustles (some successful, others not), I thought it would be worth while to showcase a few of the “how tos” for creating something that could eventually replace your full time job.

Low Margin, High Volume vs. High Margin, Low Volume

Picking the right business model is as much about personal preference as it is about nailing it out of the gate. While the best business model is always high-volume and high-margin products and services, such opportunities are almost always being filling by deep-seated incumbents and the competition is fierce.

Instead, it is often best to focus on niches where entrance into the given market is a bit easier. This often includes areas where the margins may be lower and the volumes are higher or where the volumes may be low and the margins may still be high. Examples might include:

  • Consumer products and services with lower margins, but where there are large online search volumes and relatively moderate to low competition. Dollar Shave Club, Harry’s and even Amazon when they first got into the books business are good examples. However, in today’s world, you have to look into a much deeper niche. Don’t think more broad, think more narrow.
  • Business products and services that also have low to moderate competition, but where the margins are high enough. Providing a marketing, accounting or business consulting service to a local company may be a great means of getting the business the initial revenue it needs to get off the ground.

In many cases, looking for the right side hustle is most importantly tied to your passions. That way, when the going gets tough and least you have an easier ability to dig deep and keep pushing hard because you have (or at least had) that passion at the outset.

Online business owner creating campaigns

Online Marketing: Building Links and Quality Content

Plenty of places will give you the detail on how to get a domain, set up your website and start selling your product or service. It’s become somewhat of a commodity and an easy to perform task, which is why I’ll not emphasize it here.

No, the component of your online business that will yield the greatest impact is the amount of work you put into the quality and quantity of your content both on and off your website.

New and regular on-site content is–for the most part–created for and housed on your site’s blog. After you have created informative landing pages for your product and/or service, you will want to discuss those products and services in-depth on a regular basis through your company blog. In doing so, you will be creating internal on-site links using anchor text for terms that will matter to your readership and customers. For instance, if you are selling designer watches, you may want to link to your product pages using derivations of the phrase “designer watches” as your anchor text.

Whatever your chosen niche, keep in mind: a brand new website can take years to rank in the search engines. This is not only where the patience comes into play, but also the greatest share of the required work and input. That is due, at least, in part to the fact that both your on and off-site content should be of the highest quality caliber and drive its own links.

And while you can control your on-site content, the backlinks you are able to acquire to your site will be one of the primary drivers of your organic success in the search engines. As you look to build out your off-site content, you will want to take time to engage in your own campaigns, guest blogging for SEO, or engage in any number of outsourced SEO link building services. As a side hustle startup, it is advised that you, at least initially, perform most of this work on your own, drumming up your guest posting and guest blogging opportunities on your own.

Growing online business

When Will it Become Passive?

How will you know when you have built something that has real staying power? When will your side hustle be able to truly yield real results and bring you the eventual passive income you desire?

The answers to these questions are dependent on many factors, including, but not limited to:

  • The competitive nature of your niche
  • The length of time you’ve been indexed
  • The total number, quality and relevance of your backlink profile
  • The sell-ability of your product or service, the branding of your service and your ability to sell it to a real audience.
  • Your website traffic.
  • The relevancy of your website traffic.

The last point above is perhaps one of the most critical. If you blog incessantly, including guest blogging, and acquire a large number of regular website visitors because you now rank for various online searches, you should start to convert at least some percentage of your visitors. Once you do, you can then snowball it into other areas.

Keep in mind though that once you have created an income stream from an online-focused business, the income will not immediately be passive. You will need to implement systems and process (including the right people) to take it to the next level and truly make it a source of “passive” income.

Passive income business owner working on his business


Countless online gurus exist, touting their unique knowledge of how to build a passive business using the internet. If they claim it will happen quickly, run. In most cases, online business success still takes years of hard work and concentrated effort, working on both the product and the service as well as marketing it to your target audience.

Building a brand, particularly online, is not easy, but if you have a focus on the long game, you will almost always win.