How To Make An Extra $500 A Month Online With 3 Business Models

One of the most important business lessons I've learned so far is to not be afraid of numbers.

Please don't head towards the back button right now because I only mentioned the possibilities of math coming up 🙂

(I'll be sharing some tools below too!)

This topic is important because if you want to have long term success with your business ideas, you gotta know your numbers.

I'm not talking about creating a “business plan” either.

I'm just saying it's smarter to think through the math first.

Reverse engineer your income potential before investing too much time, energy and funds.

Not knowing your numbers can and will bite you in the ass many months later.

In today's example though, I want to walk you through how to make an extra $500 a month online with three distinct business models we know very very well:

1. Affiliate marketing, specifically with Amazon
2. Displaying advertising
3. Product creation

There certainly are some ninjas in our audience so I know a few of you are already saying “I already know this stuff man!”

Which might be somewhat true…

But the downloads below are still going to be useful for you in the ideation AND content planning stage.

In any case, whether you're a newbie or a grandmaster, this blog post will give you something a solid business lesson.

Now let's get started!

How To Make $500 a Month As An Amazon Affiliate

Amazon's affiliate program has been running since 1996 and is one of the largest out there. 

After all, Amazon.com handles 49% of all US transactions so there's a lot of people in the buying mood there.

For content producers and influencers, the Amazon affiliate program gives every affiliate 24 hours to “close” a sale and will credit that affiliate for every product in a shopper's cart.

The term “close” is used loosely here since most affiliates are simply driving traffic to Amazon and letting the ecommerce platform handle the close/conversion.

PROs

• No need to provide customer support
• Fairly passive
• Lots of buyers for content businesses
• Easy to start when you have no ideas for products
• You get commissions for every product a shopper purchases
• Forces you to “follow the money” online

CONs

• No control over the affiliate program terms
• Not as easy to monetize via social media
• Much smaller commission rates, compared to other affiliate programs. (But the conversion rate on Amazon is higher than the average site)

Below is a calculator with preset numbers to give you an approximation of how many articles you'd need have in order to earn $500 per month, in any of Amazon's product categories,

Disclaimer: Even though we put together a high-quality calculator, there are also many unpredictable variables. For example, search volume and product prices vary a lot for every search term – this in turn affects your commissions. More on this below…

Major Factors That Affect Your Affiliate Commissions

1) Price of products

In the calculator above, we used the average price of $50 for every product because it was simpler.

In real life though, product prices can range from $1 to thousands of dollars.

For example, it's likely that a category like “outdoors and tools” will contain wide price ranges. From an outdoor light that costs $8 to an outdoor grill costing $400.

You also get credited for every product inside that person's shopping cart, so they could essentially buy both the light bulb plus the outdoor grill and your commission would be based on the entire cart.

You'd also get commissions for products the shopper purchased from other categories too.

2) Search engine optimization

Search volumes vary and so do your positions in the search rankings.

There's a slim chance that all your 200 articles will be ranked exactly at #3.

It's more likely that your rankings will be all over the place. Some will be on the 4th position, others on the 19th, and some in the 1st position.

Same goes for search volume.

Tools like Ahrefs and KWFinder give you estimated monthly search volume in a very simplified fashion. Not every month has equal search volume but these tools certainly help us with rough estimates.

In our example from the calculator, we used a search volume of 500 for every article.

On our sites though, we've gone after huge buyer keywords with 78,000 monthly searches and even search volume of 0-10. 

So it's hard to apply one search volume metric to all your articles.

As a sidenote, the higher the search volume for a keyword, the more competitive that keyword is.

For sites just getting off the ground, don't be afraid to go after 0-10 search volume keywords.

Keywords with low search volume have low competition and you'll start seeing the benefits of your SEO efforts quicker. This will help keep your spirits up and get that early traction.

For more info on why 0-10 search volume keywords are still good to go after, check out our podcast case study with Jaron here.

What It Takes To Earn $500 a Month Using Ads

The benefit of running ads on your site is that every page you create can essentially be monetized.

That means that even your homepage can be monetized with display ads and also that blog post you wrote 6 years ago.

Here's a calculator we created based on 100,000 page views with average revenue numbers for impressions (RPMs) and clicks (CPCs)

PROs

• No need to run customer support
• Can be passive, depending on whether you are building up your SEO
• Every page on your site can be monetized
• Flexible: You can join an ad network or work out private deals with advertisers

CONs

• You need to have certain traffic numbers before getting into a premium ad network
• Can slow down your site
• Poor user experience
• Just like Amazon, certain categories allow for higher revenue and sometimes your site can be too niche that there aren't any ad networks specializing in it

What Factors Matter For Your Ad Revenue

1) Revenue per mille (RPM)

This is a dollar amount you earn for every 1,000 views of the ads on your website.

The number varies from $2 to $50+ so you can really earn a lot of money if you're in the right niche.

The revenue is affected by mini factors like your niche, quality of content, traffic sources, and the number of competing advertisers pushing up the bid.

2) Cost per click (CPC)

With CPC you're being paid based on a per-click basis. This means that someone has to click on the ad in order for you to get paid.

CPC also varies based on the industry the ad is in.

Just like getting paid via “impressions”, the payment of each click varies based on the advertisers industry.

Although, now a days, most of the display ads are retargeting ads where you are shown ads to sites you've already been on.

This can work in your favor though since retargeting ads are likely more relevant most of the time.

Sidenote: A few popular ad networks that can pay more than Google AdSense would be Media.Net, MediaVine, AdThrive & Ezoic.

How To Make $500/mo With Your Own Product

With your own product, you have a lot more control over margins.

Not only do you keep a higher percentage of the sale, but you also have the flexibility to raise prices according to increased demand and increased quality.

You also have the power to lower prices for sales or whatever you want.

Here's a simple chart showing how much traffic is needed for a site to make between $500 to $3,000 per month selling a $50 product at a 3% conversion rate.

PROs

• You get a higher percentage of the sale
• You control the product's unique selling proposition (value)
• Price control
• A larger moat around your business

CONs

• Depending on the product, it may take a while to get started
• Support can be a hassle

Beyond affiliate marketing and ads, we really do love creating products too.

(As you can tell from our products and services page :P)

The benefits of adding product revenue for your site are obvious, but we often times see folks investing a lot of time and money into creating one but only to have it flop.

This is why measuring your content metrics and affiliate marketing stats can play a key role in the success of your product, not only in the planning stages but also in the goto market phase.

The best way to sell a product is by serving it to an already hungry and existing audience.

An easy way to test out creating a digital product is to gather up your most popular blog posts and compile them into a single download (ebook.)

You might want to add some new original content in there too, but at least have a skeleton laid out.

This is something we've done with our own sites and now offer this as one of our services.

To get us to create an ebook for your site, click here.

Suggested podcast episode:How Alex grew Avocadu.com with digital products & Pinterest (coming soon – Episode 58)

Which Should You Choose To Monetize Your Site With?

The simple answer is ALL of them. 

They aren't mutually exclusive.

For us, it makes sense to start your site off like so:

1. Use affiliate commissions to build the foundation of your site (learn more here)
2. Then utilize ads once your site is gaining lots of traffic
3. Create a product based on your deeper knowledge of the audience

As I mentioned above, this way of starting a monetized website teaches you to “follow the money” and gets you understanding how the top of the funnel, leads to the middle, then to the bottom – which is where your affiliate content slides in.

Before You Get Started…

Running ads on a site isn't everyone's cup of tea.

Some sites that generate lots of traffic purposely don't run ads to increase conversions for their affiliate content plus they feel that ads degrade the visitors' experience.

Other sites don't use affiliate commissions at all and only run ads.

So it's not a must to run all three monetization methods on your site.

Starting with affiliate content is just a guideline, but it certainly has worked for us and hundreds of our customers (see testimonials here and ​see success stories here)

We've put together a solid course and community of folks doing the exact same thing as we've outlined above, so come check out The Human Proof Method here.