Eight ways in which websites make money

Here are eight ways in which a website can make money. This is a sub-set of the many ways one can make money online. If you are interested in a secondary source of income and will work on it slowly and consistently, these methods could work if you are patient for a few years.

When you run a website such as this for a few years, it is natural to accumulate quite a bit of side information on SEO, site speed, monetization, ways to make money online etc. This year. I would like to discuss this from time to time.

Interested to make money online? Here is what you need to know

The internet is a great income generation opportunity, provided you keep in mind four simple rules:

  1. What you do should be of use to others
  2. You must be willing to learn all the time, experiment and modify
  3. It will effort and time. It is like taking a tablet that will work after 8-10 months.
  4. Most important of all:  You need a clear plan

In this article, we will focus on ways a website can earn money and discuss the plan (point 4) and how to get started separately. If you are interested in this now, check out the video I made yesterday

Eight ways in which websites earn money

In what follows, we shall only discuss website monetization ideas. So that is, if you have a website, these are major ways of making money. I do not claim these are the only ways. Let us first list them and then discuss each idea.

  1. Display Ads
  2. Affiliate marketing
  3. Sponsored posts
  4. Subscription website or service (premium content)
  5. Sell e-products: e-books, calculators
  6. Sell your expertise (consulting)
  7. Sell goods
  8. User contributions

Eight ways in which websites make money

1 Display Ads

This is probably the most popular website earning method known although many successful websites either do not use display ads or only depend on it to a small extent. You see display ads from Adsense at freefincal.

There are many type of ads: banner ads (eg. ad of a product), native ads (e.g. article from another site linked within content). Media websites rely heavily on display advertising. It makes sense for them as the traffic volumes are high.

Pros: Easy to set up. It is the best committment-free way for an audience to help a website It works great when the audience looking for a spefic piece of information and do not come back to the site.

Cons: Will only work after the site is established. At least 1000 page views a day (more is better)

So this method does not make sense for a new website. A common newbie mistake is applying for the adsense program too soon only to get rejected and giving up on online money making dreams.

Many people have told me that I will lose traffic becuase of too many ads on the page. Well they must recognise that they do not have access to site analytics (like I do) and do not understand how different traffic sources contribute to making a site more visible.

I hate the ads just as much as anyone else but I cannot find any other way to fund the website expenses consistently. Please do not say, user contributions (see last point). I have tried it and it does not work. If you do not want to use ad-blocker, but still want ad-free freefincal content, you can now subscribe to ad-free freefincal articles!

2 Affiliate marketing

Second most popular way of earning money from a website. You write a detailed product review and link to the product. The link contains a tag that uniquely tell the product manufacturer or seller that your website is the source of traffic. If someone buys that product after using your link, you get a cut from the purchase. For some services, you will also get trail commissions like in a mutual fund.

Pros: Even easier to get started than display ads as there are not restrictions or requirements. If you know how to write good content, the you can traffic to the article within a few months. This also works when people search for a specific product or service, find the review article with the affiliate link, use it and do not come back.

Cons: Needs research: Which niche and which player offers the best affiliate commissions. Which kind of items or services would peoplesearch for and pay for. Requires basic know-how of writing a targetted SEO friendly article

Affiliate marketing is gaming the system. If you have ten brands of a particular product, good affiliate marketers would focus on the products with best income and write SEO optimised content. This means a good product (often free) will not show up on Google. There is a conflict of interest associtaed with affiliate marketing.

Many webiste owners do mention that links are affiliate on each article and only do so on their privacy page.

Affiliate markeing will work best for websites with high traffic from Google. That is visitors do not care who  has written the content. If you wish to build a community of readers and want to create a brand image for your content, affiliate marketing can backfire unless you are upfront about it.

My personal stance on affiliate marketing is that it is unethical. I would rather write a post on how to get suff done at low cost or even free and generate display ad income from it, then write a review post and earn affiliate income.

3 Sponsored posts

If there can be a greater evil (from the pov of a reader, not monetizer!) than affiliate marketing it is the sponsored post. Today buying ad space from a website – a banner on the side bar – is dead. Marketing agencies now want to write full length articles which are actually nice formatted advertisements.

Pros: If you have regular traffic, then this can be a good source of income, but can destroy loyalty.

Cons: That regular traffic will be put off if you do this once too many. A sponsored post will work only if the article is good enough to get traffic from Google. Readymade content dished out by agencies are not good enough in my opinion. The alternative is that the site write the content themselves and get paid for it. This way there will be greater control on language, SEO and utility for readers.

Sponsored posts will work oly if your site is established but can easily destory that hard earned reputation. Many authors do not dislcose content is sponsored (one such author is subscribed to this blog and this is a message to him/her) and this is just terrible ethics.

In essense sponsored content will work only you have a large readership that has low expectations from you. That is it will work the best for media houses (and many news stories are paid for). For individual websites, sponsored websites will work only if they generate google traffic consistently.

My stance on sponsored posts: It is unethical especially if you wish to create a brand. Use this (or affiliate marketing) if you wish to remain anonymous or in the background.

4 Subscription website or service (premium content)

This is when people will have to pay for content or advice or the use of some tools. This will work only when your site and reputation is well established. If this is your goal, then you will have to work towards it (ignoring the above methods). This is harder to be profitable. You will have to showcase your competance for months and months for people to sign up. The content you offer should not be found elsewhere for free!!

Pros: Nice clean way of making money, but will require site maintenance and recurring plugin costs.

Cons: Harder to make it work and will take time, but possible with competance and confidence. This can be drain on time if you do not plan it well.

Example: Freefincal offers a ad-free newsletter for Rs. 3000 a year. Of course there are only a few sign-ups (I only wanted to offer a choice for ad haters who also did not want ot use blockers)

5 Sell E-products: E-books, calculators etc

This is a fantastic and ethical way of making money from a website. You crete an e-book, say 50-100 pages on how to start a website, how to travel cheap, how to care for your bike, camera etc and sell it.

Pros: Most satisfying and ethical way of earning money online (assuming that the content is original). Even better, this is the most time-efficient way to generate income. Once you create the e-product (and created a backup!!) there is literally no maintenance!

Cons: For people to buy, the site must have an established reputation with many articles on the subject. You should write interest content in the articles not found in the e-books! You cannot sell it for big money. People would shell out only few hundreds for such products.  Since it is a digial product, it can be hacked easily.

Example: Freefincal Robo Advisory Software Template is free to use but one must pay to modify features.

I am working on a product of advisors and website owners. Will take a while though.

6 Sell your expertise (consulting)

This is well known and the first reason why a company or service would have a website. However, unless one draws in traffic from various sources, a website for consulting is of no use. It is not necessary to have a website for this in day and age

Pros: Nice clean way of earning money online with training and expertise

Cons: Requires knowledge of content generation to draw attention to your service. Will take time to get esablised. Also this is time consuming. So avoid unless this is your passion.

If you wish to sell your expertise primarily, then other forms of income like ads, affiliation, sponsored posts, should not be turned on!

Every day I receive a, “can you help with my finances, I will be happy to pay” kind of email (to which I reply in the negative). The reason is simple: people look at the content and assume (incorrectly) that I am good enough for them. Unless you can do this consistently, this method will not work. At best it can only be a supplemental income.

7 Sell goods

Again a nice clean way to make money but effort is necessary to draw people in. Also requires quite a bit of effort and compliance: Packaging, insurance, regulations and laws. LIability is pretty high in this method and should be used only if it is a calling. For e.g. herbal soap making, cosmetic and cooking powers etc. However, scope for growth can be slow if not limited.

8 User contributions

You turn off ads and all other forms of monetization and ask readers to pay for website expenses. There are sites like patreon that can work well with this model. This can at beat a supplemental income and not the main source. It is a catch-22: If you also have ads running, people will not pay.

I tried this three years ago. There was huge increase in contribution when I wrote the post and then it met a quick end. I appreciate a Rs. 100 contribution, but other than moral support it is not of much practical use.

An example of where patreon works in tandem with ads it the Geography Now Yotube Channel (introduced by son, watch with your kids). Another example is the History Buffs channel (great watch for movie lovers).

What about Youtube?

It will work great if you wish to have only a Youtube presence (eg. Dave Hax) or wish to drive traffic to your site (which is my goal, so far, so good). There are however strict monetization thresholds and it will take a while to get there, unless you can write super catchy (not necessarily useful) content. So you will have to careful and plan goals carefully. Please remember videos editing can be a time and money consuming affair, so keep it simple first.

Summary

We have discussed the pros and cons of eight money making ways from a website. Affiliate marketing with writing skills is probably the easiest way to get started for those who do not care about what they write as long as they get money. Ad income and E-product income can be good supplements down the line with initial planning. We will discuss these in another post. Do watch the video linked above for the next steps.

Watch my #10YearChallenge

Subscribe and join the freefincal Youtube community!

 Don't like ads but want to support the site? Subscribe to the ad-free newsletter! 
You will get the full post-ad-free delivered to your inbox for Rs. 3000 a year. Follow this link to read the terms and sign up! 
Want to conduct a sales-free "basics of money management" session in your office?
I conduct free seminars to employees or societies. Only the very basics and getting-started steps are discussed (no scary math):For example: How to define financial goals, how to save tax with a clear goal in mind; How to use a credit card for maximum benefit; When to buy a house; How to start investing; where to invest; how to invest for and after retirement etc. depending on the audience. If you are interested, you can contact me: freefincal [at] Gmail [dot] com. I can do the talk via conferencing software, so there is no cost for your company. If you want me to travel, you need to cover my airfare (I live in Chennai)

Connect with us on social media


Do check out my books


You Can Be Rich Too with Goal-Based InvestingYou can be rich too with goal based investing

My first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create customg solutions for your lifestye!Get it now.  It is also available in Kindle format.

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want

Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you want My second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a youngearner

The ultimate guide to travel by Pranav Surya

Travel-Training-Kit-Cover This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step.  Get the pdf for ₹199 (instant download)

Create a "from start to finish" financial plan with this free robo advisory software template


Free Apps for your Android Phone

All calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)

About Freefincal

Freefincal has open-source, comprehensive Excel spreadsheets, tools, analysis and unbiased, conflict of interest-free commentary on different aspects of personal finance and investing. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. We do not accept sponsored posts, links or guest posts request from content writers and agencies.

Blog Comment Policy

Your thoughts are vital to the health of this blog and are the driving force behind the analysis and calculators that you see here. We welcome criticism and differing opinions. I will do my very best to respond to all comments asap. Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.
Updated: January 26, 2019 — 10:14 am

The Author

M. Pattabiraman

This article is authored by M. Pattabiraman. He is the co-author of two books: You can be rich too with goal based investing and Gamechanger. He is a patron and co-founder of "Fee-only India" an organisation to promote unbiased, commission-free investment advice “Pattu” as he is popularly known, publishes research, analysis and holistic money management advice at freefincal.com which serves more than one million readers a year. Frefincal.com has more than a 100 free calculators on different aspects of insurance and investment analysis, including a robo advisory template for use by beginners.