Passive income is income that you earn without being directly involved in a direct time for money exchange.
On the flip side, if you’ve been seeing clients one-on-one, it’s likely you’ve been billing a rate for your services (i.e. exchanging money for time). While there’s nothing wrong with this, this business model has limits. You only have a certain amount of hours to work in a day which means your revenue will eventually be capped.
Sure, you can increase prices, but at some point, you’ll either have to send clients away or hire out to accommodate demand and/or prevent burnout.
Passive income allows you to scale your business model.
For example, if you build and sell a digital product, you’ll continue to get paid even after the work is done. In other words, you are getting paid multiple times for the same information, service, whatever. And while your health consulting business might, say, accommodate 100 clients monthly, the market for your digital product is potentially endless, or at least significantly larger.
I’m a big fan of generating passive income in your wellness business, but I’ve never loved the term because very little feels passive about it.
The reality is that any passive income stream will still require work not only to start but also to maintain and grow. Plus, most passive income streams are definitely not a short-term money-making strategy. If you’ve ever started a blog, for instance, you know exactly what I’m talking about.
Whether you desire passive income as a primary means of revenue or to complement other sources of income, there are a variety of avenues to consider. And the cool part is that if you create multiple passive income streams, they don’t have to work in isolation. You can use smaller dollar offerings to upsell your bigger ticket items. Below, I’ve curated a list of digital passive income streams with real-life examples from some of my favorite wellness entrepreneurs.
If you’re creating any kind of online digital content for an audience, you’re potentially creating ad space. One way to generate ad income via blog, podcasts, YouTube videos, Instagram, and other digital content is through sponsorship. Sponsored content is a great way to generate ad income because you ultimately have control over who your sponsors are and how you promote them. Interested in learning about how exactly to nail down a decent sponsor? Check out these actionable tips.
Affiliate marketing basically allows you to earn a small commission off a product you’re promoting for someone else. Here is a quick affiliate marketing tutorial for beginners.
Affiliate marketing and social media are a match made in heaven, which is why building a large Instagram following (or just a highly engaged one!) can pay off (quite literally) in the long run. The more trust you build with your social media communities, the more powerful affiliate marketing may be for your business.
How much do affiliates get paid? That totally depends. Amazon’s affiliate program, while popular, has a very low commission rate. Other products may have more enticing payouts. For example, Practice Better offers affiliates 10% of the revenue as a commission from paid subscriptions. That Clean Life offers a Partners Program, which allows you to earn 30% commission for each lead who signs up for a paid membership through your link. Not too shabby.
I personally will only partner as an affiliate if I have used or tried the product and actually like it, believe it has value, etc. For me, this is a non-negotiable affiliate marketing best practice.
And speaking of best practices, disclosure is a must. Don’t be sneaky about affiliate links. Do be honest when you’re including a link to earn a commission. It's the law.
And then there are third parties, such as Google Adsense, who will pay for ad space. This means you can boost your revenue by tapping into large networks of online advertisers who bid for your ad space. The more monthly visitors you have, the more you’ll qualify for premium ad networks, such as Mediavine or AdThrive. In an ad scenario, you’ll typically be compensated on a per click or reach basis.
Of course, ads, sponsorships, or affiliate marketing campaigns don’t translate into significant cash flow unless you’re diligently producing quality content and cultivating an engaged audience. Another reason why the term passive income is a little misleading, IMO.
Bottom line: anyone generating consistent passive income to scale their wellness business arguably works VERY hard to see results. Here are some examples from wellness entrepreneurs who use meaningful, targeted digital content to produce ad, affiliate, and/or sponsorship revenue.
And then of course you can generate passive income by selling your very own digital goods, such as e-books, digital courses, programs, handouts, meal plans, etc. This is where you can have a lot of fun and get really creative!
Many digital goods provide the ability not only to make money off the product sale itself, but also to generate income via ads and affiliates embedded into the product. In other words, digital passive income streams often play nicely together.
Before you set out on creating a digital program or even writing an e-book, it’s important to do your research. You probably get the gist by now, but creating and marketing something like a digital course is a substantial undertaking. Don’t take it lightly. Do think carefully about the problem you’re trying to solve. Do be strategic about who you’ll be selling to.
If you already have an engaged, niche, community somewhere, then creating a digital good or program might be a terrific addition to your wellness business.
The good news is that if you’re interested in creating a digital course or program, there are some really great tools to help make this much easier than starting from scratch. Consider using a course builder such as Teachable or Thinkific!
I’m also going to lump supplement sales under digital goods since, as a practitioner, you can generate passive income off supplement sales without ever even touching them. This can be done directly through an affiliate relationship with a supplement provider or through a third party such as Fullscript.
And just like with any affiliate relationship, be sure to disclose that you are earning a commission off your supplement sales.
Digital products include things like apps and other web-based platforms. We all use digital products every day, for everything from project management to buying things online to writing this blog post and beyond.
Digital products often require development investment up front, but, if done right, have the potential to solve major pain points for people. When you find that sweet spot between innovation and practical problem solving, magic can happen.
Some digital products may require a one-time purchase, while others will be subscription-based, such as a membership site. While setting up a membership site typically requires a significant time investment up front, it offers a means of sticky (i.e. recurring) and accumulating monthly income. Desirable? Certainly. Quick, easy money? Unlikely.
Pro tip: you’ll probably want to have an audience or community established before creating a membership site. Watch this video to see how a membership site is this entrepreneur’s most lucrative passive income stream, plus learn more about the pros and cons.
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