My Favorite Passive Income Source
Everyone who has already dealt with the topic knows that there are many possibilities for passive income. And with many possibilities I mean also many possibilities. Hundreds, if not thousands. Both offline and online strategies are included.
In this article, I would like to discuss my favorite and justify why I consider exactly this one to be so promising.
E-books:
We get information within seconds these days. A simple Google search is enough and we find different solutions to our problem. Even if we don’t have a problem, we can find the right answer to our question. Google makes it possible!
What does this have to do with e-books?
One problem I see with myself, and I think many more people are affected by it, is that of credibility. Can you trust the search result? If you’re not sure, you visit other sites and read their opinions on the subject at hand. Most of the time, when you get a consensus from many different sources on a topic, you think you’ve found the answer or solution to a problem.
Let’s take it a step further:
We want to create something. For example, the first online business of our own. So already here we are looking for different possibilities. Especially in this area, it is so that everyone considers a different business model as the best. It is similar with this article here. I present here my favorite. Now this doesn’t have to mean that the majority of other online entrepreneurs also consider it that way. Mostly, you write about the things that you have already implemented yourself, where a certain experience is available and, in the best case, where already more or less great successes could be booked.
The more you have to research for the particular project, the more sources you will have to refer to. This means that the issue of information overload quickly becomes present. It is also difficult to judge whether person A is making the right statement or whether person B is.
An E-Book of an experienced person is to provide remedy here!
So I see this business model as ideal both as a customer and as an entrepreneur.
My reasons:
- Information bundled
In the best case, a proper e-book on a certain topic covers all possible questions relevant to the topic. Instead of carrying out the above-described research process yourself, a proper e-book on the topic offers you all the information bundled together — ideally. In addition to the information, you also benefit from the knowledge of the publisher. Maybe he shares his personal experience in detail or adds a real life case study to the book? In my view, this is the holy grail of added value creation. It doesn’t get much better than this, from the customer’s point of view.
- Marginal costs are almost 0
Now that this article is supposed to look at the entrepreneur side, let’s go into an economic plus point from the entrepreneur’s point of view.
The e-book is created, you make a suitable sales page or landing page and then generate traffic. As soon as someone buys, the e-book is automatically sent out. If this process is repeated, i.e. if another purchase of the e-book is made, no further costs are incurred — except for possible paid ads costs. Hence the great advantages of marginal costs. They are virtually 0.
- Time To Market
Yes, creating a decent e-book takes time. Sometimes the implementation takes several weeks. We want to create added value and not produce cheap junk. Nevertheless, in contrast to other business models, the time and effort required to produce our first e-book, including all further steps for distribution, is kept within reasonable limits. Produce → Launch → Finished
- Up-sell and cross-sell opportunities
With many physical products, the possibility in terms of up- or cross-sells is limited. With digital products, you can let your creativity run wild. For example, do you want to cross-sell a workbook, coaching, software or something else? No problem at all. Since the basic product is a simple book, which can contain complex topics, the possibility of up-selling and cross-selling is more than given.
- Returns
The customer does not like the product for some reason? No problem! The purchase amount is returned to the customer and the matter is closed. No returns management in the classic case is involved. We don’t have to put the e-book in the package and return it afterwards….
- Margin issue
Yes, the good old margin issue. With digital products, it almost always seems utopian how beneficial the margin theme is. The profit margin on a digital book, compared to most physical products, is horrendously high. In all likelihood, the first sales will not make up for the effort. So we need some time to reach the break-even point. After that, however, minus the cost of providing the e-book and possibly hosting fees, each sale becomes ~100% profit. If the e-book costs $19, then about $19 ends up in your pocket. Marginal costs say hello!
Are e-books really passive?
Yes and no. The creation of the product takes time accordingly. Setting up an optimal sales page can also take a little longer. The same applies to setting up possible traffic channels (especially paid ones). However, once these points have been taken care of, at least the sales process is automated and no further work is required in this regard. However, the situation is different when it comes to support. If a customer has a question about the e-book or has problems understanding it, he or she will often ask for help by e-mail. In the course of a proper customer relationship, one should also respond quickly to these support requests. This is one of the few points that still require active work after the launch of the e-book. If I were now asked about the degree of passive revenue opportunity, I would answer “90% passive”. However, outsourcing strategies still offer some room for improvement.
Finally, I would like to mention that these advantages can also be applied to other, similar digital products. So they would be there if you offered an online course, for example, or a webinar.
I personally consider many other digital business models to be equally relevant. But the e-book model captivated me 10 years ago and the disadvantages are reduced to a minimum.
