Passive income comes in different flavors, from investments that generate regular payments to low-maintenance small businesses. What they have in common is that you can make money without actively working. The idea is that once you’ve done the groundwork, it will take minimal effort to maintain.
The challenge is that you have to invest money, time, or both to get your income streams up and running. That might mean buying income-generating assets or setting up a passive income business. This article discusses how to build a popular passive income enterprise: a print-on-demand business.
Figures vary, but according to Gelato, the average print-on-demand business makes over $4,600 per year. Other studies suggest you can make between $1,000 and $5,000 once you’ve gained traction.
If you’re making that kind of money, it’s important to use a business bank account to separate your personal and business spending. Check out our list of the top bank accounts for small businesses to find one that works for you.
Step 1: Brainstorm
Every money-making enterprise starts with idea generation. In this case, you’ll need to think about designs and products that people may want to buy. Try to find a theme that fits with your own passions and interests. That might be jokes, pets, cartoons, hobbies, or even your work.
You can also look online for ideas, see what’s trending on social media, and talk to friends and family. It’s important not to copy other people, but you can riff off what others are selling — perhaps 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 that you’re closely familiar with.
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Once you’ve narrowed down a theme, you can start to develop your product range. Look into specific products such as T-shirts, mugs, or tote bags and consider what will work best for your market.
With print-on-demand services, your products are only created when someone orders them. That gives you a lot of creative freedom because you won’t get stuck with a warehouse of unsellable items.
Step 2: Make a plan
Print-on-demand services don’t require huge amounts of time or money at the start. Even so, it’s important to do some groundwork to give your idea the best chance of success. Planning will help minimize the amount of time you put in and maximize the money you make.
Here are some things to consider:
- Map out your costs and potential earnings. Make a budget that includes any start-up and ongoing costs.
- Learn more about your customers, particularly how broad your customer base might be and how to reach them.
- Compare print-on-demand services to pick 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.
- Ensure none of your designs or slogans are under copyright.
- Decide how you’re going to sell — you can build your own website or use an existing store.
A solid understanding of your customers and the broader market will help you build your brand. All the research you do will feed into your designs and product range.
There are lots of design tools online that can help you perfect your creations. If you aren’t great at design, include the cost of a freelance designer in your budget.
Step 3: Test your idea
Once you’ve firmed up your offer, you’re nearly ready to go. Before you sell anything to the general public, order samples of your products to check out the physical items. That way, you can address any issues with quality and fine-tune the design if need be. You can also take photos to 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’re able to get input from your target customer base, so much the better.
Step 4: Take it to market
Online marketplaces like Amazon or Etsy can be a great way to tap into a huge existing customer base. However, the charges, 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 e-commerce solutions that make the process super easy, even if you’re not technically inclined. If you go this route, be prepared to spend both time and money on marketing and customer service.
Bear in mind, it isn’t a question of one or the other. You can start with a hybrid model and as your brand gets bigger, push customers toward your own website.
It will take less than a year to build your print-on-demand business
Print-on-demand services can be an excellent passive income-generating business choice. Not only is it easy to get started, but your start-up 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 factor any print-on-demand and online marketplace fees into your financial estimates. Set clear financial goals and keep an eagle eye on your bottom line to maximize your profits.