3 levels of making money online

3 levels of making money online

Considering money, It is the fundamental need of a human being to buy kinds of stuff which they are interested in and needed most. Also, money is a massive source of stress in most of our lives. We often feel we don’t have enough of it. A huge chunk of our short time on this earth is to go to work so we can make money which we need to live.

But being able to make money outside of our day jobs is pretty cool. It means that if we’re lucky enough to be doing a job that we love then happy days, we’ve got some spare cash to go on holiday with. But if maybe we’re not entirely happy with working 40 to 80 hours a week then we’ve got the option of going part-time or taking a job that pays less. But we enjoy more or even stop working altogether if we make money online.

Obviously, this isn’t an overnight thing it takes a lot of time and effort and luck. But to be honest I don’t think anyone watching this would say NO to having an extra few hundred dollars a month kicking around and the process of getting there isn’t as mysterious as it can sometimes feel. So let’s break it down. Basically, there are 3 legit ways of making money online.


What is money?

Make money online The 3 levels

Money is a medium for exchanging value like we all use money to buy things that we find valuable. And so if we want to make money or make money online we need to be providing some kind of value that someone else willing to pay for. So there’s basically 3 forms of value that people will pay for over the internet and these are three levels of making money online and that is

  1. Services (Level 1)
  2. Products (Level 2)
  3. Attention (Level 3)


Making money through Services

This one is probably the easiest way of making money online it’s the one I recommend to everyone, to begin with. There are only 2 things that we need to do,

  • First, we need to develop a skill that people are willing to pay and
  • Secondly, we need to find people who are willing to pay for that skill.

Making money through Services

Step 1 ⇒ Develop a skill that others are willing to pay for

If you’re thinking that I don’t have any valuable skills that’s okay. You’ve got the internet and you can learn.

  • When I was doing my 5th grade I wanted to be super cool and therefore I learned all kinds of flips and gymnastic stuff also I went to classes for Yoga and Karate to become flexible enough.
  • Using Google and finding a ton of free resources online, I learned how to build a website and make money.

Even if you are interested in coding your website I would recommend starting with the basics of HTML and CSS by following YouTube tutorials or by paying for something like Code school or Code academy

And then start trying to build your own personal website and if you wanna learn proper coding I’d recommend starting learning Python code.

Again if you’re not into coding there are literally hundreds of services you can offer online. Like if you just look on the websites Fiverr and Upwork and browse their categories there are literally hundreds if not thousands of different valuable things that people will pay you for.

Some of them are related to doing stuff on the computer like coding, websites, graphic design, and illustration but there’s a lot of other things like writing, copywriting, data entry, being a personal assistant, and admin services. It doesn’t matter where you are in the world, as long as you have a reasonable internet connection.

Like not having a monetizable skill is not an excuse anymore at all, if you want to make money online. Because you can literally teach yourself anything over the internet and then you can sell that skill to other people.

Step 2 ⇒ Find people who will pay you money for that skill or service

There are two sorts of people who will pay you for your services essentially. People in real life and people on the internet. People in real life can pay you in hand when you’ve done the thing that they want.

Jumping to people on the internet, These days places like Upwork and Fiverr that seemed to be the biggest ones and you can just kind of browse through all the different things people are looking for and then you can sell your services. There you can say I’ll do it for 5$, I’ll do it for 10$, I’ll do it for 20$, I’ll do it for 50$.

And over time as you get better at the thing you can start charging more and more especially as you start getting decent reviews and you start building up your own portfolio of whatever the thing is that you are doing.

Ultimately what you are doing is you are trading your time for money. And that’s ultimately not a very scalable model because obviously, our time is limited.

So if you really wanna make money online then we want to get to Level 2.


Making money through selling products

Making money through selling products

Making money online through selling products is like you are selling products in the form of physical or digital goods. Then your ability to make money online magnifies a lot because it suddenly becomes scalable like it’s not directly tied to the amount of time you’re putting it. Now if we want we could sell pretty much anything online but the ideal thing that we wanna sell is something that has

  • A one time cost of time or money to make then we can sell infinite copies
  • And we want the cost of reproduction to be zero
  • Ideally, we want the cost of distribution to be zero and
  • Ideally, we want the ongoing time commitment to be as low as possible.

So that we can make the things once and then we can sell it like a million times without having to spend much more time. So the ideal product category then is digital goods or digital products.

Now a digital good is anything from a website to an app or an online course or an E-book. All of these things have a one-time cost of production, a zero cost of reproduction, zero cost of distribution, and hopefully a zero cost of maintenance as well.

Alright, we can either sell digital or physical stuff but obviously, I think digital is better. Also, the products are basically in two forms

  • We can either sell other people’s stuff or
  • We can sell our own stuff

Selling other people products

Selling other people products is Level 2 basic. Now there are various ways for doing this but just simply for clarity, we are going to see about two. Firstly Dropshipping and secondly Affiliate marketing.

1. Dropshipping

The basic idea is that we could make a pretty-looking website that sells nice-looking watches. For a hundred dollars apiece when a customer orders that watch, we then buy it from a third party that actually sells the watch for 50$ and we arranged for them to ship it to the customer. So we’re making 50$ without ever handling the watch at all.

Now I’ve never really done this myself and I would recommend you probably stay away from it as well just because I’ve seen so many kinds of online courses that seem to seem a little bit scammy about how you make money online by drop shipping.

I also don’t like the fact that drop shipping genuinely focuses on physical goods and as we’ve talked about physical goods are just not as fun to sell as digital stuff because you actually have to pay for it you actually have to arrange the logistics and the shipping is just a massive bollock whereas digital products are the way to go.

Steps of Dropshipping, 

  1. Select a niche
  2. Perform competition research
  3. Secure a supplier
  4. Build your eCommerce website
  5. Create a customer acquisition plan
  6. Analyze and optimize

2. Affiliate marketing

Now Affiliate marketing is when you’re selling someone else’s stuff but you’re getting a commission from each sale. There’s a really good website called Wirecutter and they do reviews about the best electronics in different categories and they have Amazon affiliate links. So when someone clicks on that link and buys from Amazon, the Wirecutter will make a particular amount of commission on that sale.

If you get enough visitors buying enough things you can make a load of money from affiliate marketing.

Also, you can do affiliate partnerships with certain products like there is the Paperlike iPad screen protector from the Paperlike website. And so if someone buys a Paperlike screen protector for the iPad pro using your link you will get some percentage commission on that sale and if enough people are doing that, that can make a reasonable amount of money so that is how affiliate marketing works.

If you’re interested in learning more about this there’s a dude called Pat Flynn. He runs a website and a podcast called Smart passive income and they’ve got a load of materials that teach you the ins and outs of how to do affiliate marketing properly.

Steps of Affiliate marketing,

  1. Pick your Niche
  2. Build a pretty Website
  3. Create Your Blog Posting Links
  4. Build Out Your Affiliate Site
  5. Promote your reviews on YouTube
  6. Be consistent with the work

Selling our own products

Selling someone else’s stuff is absolutely fine but really we want to be getting to the Holy Grail and Holy Grail is a Level 2 expert. Level 2 expert is actually selling our own products.

If we are selling our own stuff then we control everything from the aesthetics, to the price, to the distribution and the logistics. Here the entire customer experience we are controlling ourselves so here there’s kind of 3 broad categories of things that you could sell.

1. You could sell physical products

Peter Mckinnon has done very well selling his camera bag. Pat Flynn has done really well selling the switch pod, a tripod for vloggers it’s quite hard selling a physical product. It’s a lot of work you have to manufacture it, distribute, logistics and it costs a load of money. I wouldn’t recommend doing the physical product thing because I think personally it’s more trouble than it’s probably worth.

2. Website/ App/ Software as a service

Let’s say you make an iOS game or something and people buy it from the app store you’re making money off of that or let’s say you are making a website that’s offering some kind of service and you’re charging people a subscription fee or something for access to that service.

But If you’re a complete beginner to make money online the very first thing you should do probably shouldn’t be to try and get rich off making an App/ Game. It’s really very hard and it’s a kind of more advanced way of doing things.

3. Selling info products

This one is I think the much easier way that anyone can make money online. So selling info products means things like E-Books or digital downloads or online courses. If you can teach something and you can teach it compellingly and interestingly online. It becomes easier and easier to find people who are willing to pay you for that online education. You know more and more people are turning to online education. So if you can teach something well, you can make money off of that.

You can either compile videos on your website and fix a particular amount to access it or there is a platform known as SkillShare where you can make videos and sell them as online courses. It’s like putting effort to create videos once and It will generate passive income forever. Like SkillShare also there are few more platforms like Coursera and Udemy.

To be honest it’s reasonably straightforward to develop the sort of expertise that then means you can teach the thing and I think a lot of us really struggle with this because we think I’m not an expert therefore I can’t teach online.

But you can because if you’re a beginner you can teach other beginners. Right now If you’re thinking I want to make money online you could very easily sign up for a free trial of SkillShare and then you could watch for example how to edit videos in Final Cut Pro and then you can make your own course for complete beginners on how to edit videos on Final Cut Pro. Like it’s so easy you could literally learn anything and then you can make an online class teaching that thing to other people and If you want you can sell it through your website as well.

Obviously, it has to be good you know we make money online by providing value. If it’s valuable, people will buy it, and you just kind of make money and a pretty magical system.

But as you might be thinking you know we can make all of the digital products that we want the physical products and online courses whatever the problem is we still need to find people who are willing to part with their hard-earned cash to buy the thing that we’re trying to sell. So how do we do that? and that’s where level 3 comes in.


Making money through attention

Making money through attention

By this method, you can get your product in front of people whatever it is. You could try running Facebook or Instagram ads, you can go around knocking on doors in your neighborhood or you can send cold emails to mailing list whatever you want but really the easiest way of selling anything online is by using attention and that’s the attention of people who know like and trust you and by far the easiest way of getting people to know like and trust you is by providing valuable content on the internet completely free of charge.

For example, If you wanted to write online, now you could start a blog about productivity tips, and every week you could write one or two blog posts sharing your favorite productivity tips from books from academic papers from articles from podcasts, and your own life.

Over time if you do this consistently and provide value for free across the internet over a long period of time and then in 3 years you build a mailing list of 20,000 people and now when you want to run your own productivity course you’ve got this mailing list of 20,000 people who know like and trust you from the value that you’ve given them for free over an extended period of time and now they’re far more likely to buy your thing you’ve got an audience of people that you can sell to.

There is a guy called Gary Vaynerchuk who you should definitely be following across every single social platform if you care about making money online and If you haven’t heard of him, Gary Vaynerchuk got a book called Jab Jab Jab Right Hook and the model for that is that a Jab is when you give someone valuable content for free and a Right hook is when you ask them for something or try to sell them something.

He actually said in an interview that he wished he could have called the book Jab Jab Jab Jab…. like 25 times and then Right hook. Because that’s how the ratio of free content and paid content needs to be. But obviously, you can’t name that because it’s a title of a book. You need to be providing 25 pieces of valuable free content for every right hook that you’re launching every time.

Like Gary Vaynerchuk, you can follow Tim Ferriss who kind of modeled this perfectly over time by just flooding the market with a ton of really valuable free content not really worrying about trying to charge for people for things. And later on, you know once you’ve got this audience of people who know like and trust you If you want to sell an online course If you want to put a class on Skillshare automatically those people who are willing to hear your message and will be far more likely to buy the thing from you. Now,

  • You can sell goods or products,
  • You can sell services and
  • In fact, you can sell attention directly by doing sponsorship.

So those are the three levels of making money online. You can choose whatever way you are more comfortable with. But apart from all these levels or ways to make money, consistency and getting experience are the ways to get passive income online.

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