3 myths about passive income that simply aren’t true!
Hey hey hey! And welcome to another episode of the Simplify Your Sales podcast. Today we’re going to tackle some popular myths that you might be believing about passive income and digital products– and give you the perspective and mindset shift you need to feel confident that YOU (yes, you!) can build a profitable passive income stream into your business no matter what you sell.
It is NO secret to anyone that I love me some digital products and passive income streams. I got into my business to create a flexible lifestyle and I am NOT a big fan of trading time for dollars. Passive income– which simply means income that you earn by doing the work once (through creating a digital product of sorts) and then earning from it over and over again allows me to earn a full-time income for my family WITHOUT having to spend so much time away from them. And that’s why I am SO passionate about creating passive income in your own business– so you can get back to doing the things you love and spending more quality time with your people. That’s what this whole life thing is all about, right?!
But if you haven’t jumped on the passive income train yet chances are it’s because you have a reservation or two about whether it’ll actually work for YOU. I know that before I sold digital products, I had alllllll sorts of mindset hang-ups about things. Starting with “Is this even a legit business model?!” because it seemed too good to be true– creating a product ONCE and selling it over and over again?!?!
First things first, I assure you that it IS a legit biz model and totally doable-– and it’s not *quite* as easy as creating a digital product and plopping it on the interwebs to millions of dollars in sales– there absolutely IS work involved. But it’s work you do ONCE and then reap the rewards (and profits!) over and over again. It’s about as “hands off” of a business model as you can create– which is especially important if you value your time like I do!
But before you can dive into the strategic logistics of things, it’s important that you BELIEVE it is possible for YOUR business. Because while you’ve probably seen other businesses succeed with a digital product business model, it’s easy to get stuck in the mindset that it works for them, but it won’t work for us. So let’s tackle some of the most common mindset issues you might be running into that are causing you to hesitate instead of moving forward.
Mindset issue #1:
Myth #1: I can’t make a lot of money from digital education products.
Yep, we’re blowing the lid off a BIG myth today right off the bat– why beat around the bush when you’re *probably* already thinking it, right?!
If you’ve thought about adding digital products or a digital product line to your shop, chances are that your mind has immediately popped over to those $5 wall art prints or $2 digital planner stickers or something like that you see popping up all over Etsy.
And while there’s nothing inherently WRONG with those types of products– in fact, I’ve purchased many of them in my time– well, more so art prints than digital planner stickers– there’s the underlying issue that NO one seems to address: It takes A LOT of sales to make any substantial type of income from those types of products.
Think about it– you’ve probably seen that “super successful” digital planner shop with ya know, like, 20,000+ sales. And while on the surface it looks like they’re KILLING IT on Etsy, if you take a closer look and do a bit of math, those $2 printables that they’re selling may be flying like digital hotcakes, but they AREN’T bringing them anywhere close to a sustainable income.
Seriously– let’s dive into the nitty gritty of it: even if they sell 1 product/day, they’re only making about $300/month. And while that’s still great and absolutely worth celebrating, it’d definitely not quit-your-day-job income to write home about. They could hustle their buns off to TRIPLE their traffic + sales (and sell 300 items/month) and STILL only be bringing home less than $1,000/month. Add a typical 3% conversion rate, and that’s banking on you getting 30,000 unique VISITORS– not just views, but individual VISITORS– to your shop every month. To earn less than $1,000. And when you sit down and crunch those numbers, you’ve got to admit–that’s not that great.
So while those types of small-scale digital passive income products can be a great complement to your main business once you’re established with regular traffic and sales, they are INCREDIBLY difficult to build a full-income business model out of– especially if you aren’t already driving HUNDREDS of visitors to your shop every single day (assuming, of course, that you have a high conversion rate as well).
THE FASTER WAY TO EARN SUBSTANTIAL INCOME FROM YOUR SHOP?
Digital education products— which is basically the business model I am in right now and it’s one I am IN LOVE with and don’t see myself ever walking away from.
If this is your first time hearing about them, a “digital education product” is a digital product that you create that EDUCATES or teaches your buyer on a specific skill set that you have. In fact, I’ve got a WHOLE episode on this exact topic (you can check it out here!) that breaks down exactly what a digital education product is…and what it is not.
But basically, you’re taking your creative skillset– be it soap maker, jewelry maker, seamstress– whatever it is– and you’re creating a small digital product –something like a mini-course, a workshop, an e-book–that educates your customer’s on that specific topic.
So if you’re a soap maker, it might be a Soap Making 101 workshop
If you’re a jewelry maker, it might be a wire-wrapped jewelry basics e-book
If you’re a seamstress, it might be an advanced technique sewing course
And instead of charging $2 for your workshop or sewing course or whatever, you’re charging something in the ballpark of $27-$97. There’s a whole pricing strategy behind this sort of thing that we’ll tackle in later episodes of this podcast. But the gist is this: You are making AT LEAST $27/sale in your shop.
Which means that instead of having to make over 300 individual sales to earn $1,000/month from your shop, even if you charge as low as $27 for your digital education product, you ONLY have to make 37 sales to make the SAME AMOUNT OF INCOME. If you charge $97 for that same product? 10 sales earns you a cool $1,000.
I always think math gets more fun when there are dollar signs in front of the numbers. 🙂
Myth #2: There are no digital products that I can create around MY specific skill set and/or topic.
Let me be the first to call BS on that one, my friend. I have YET to meet someone who does not have a marketable digital education product skill inside them. There’s no such thing. The very fact that you are a unique human being with unique experiences from just flat-out living life ensures that you have talents and skills that not everyone else has. That is a FACT and there is no point in denying it.
It’s now your job to take those creative skills and experiences and talents and turn them into a digital education product because yes, you CAN charge for those skills and talents.
Think about it– people go to university and expect to pay to learn and educate themselves (even if they only take one class and don’t earn a degree– it still costs HUNDREDS of dollars!). Local community courses you can take at the local colleges also charge per class for that type of education. In fact, when I was first married, I paid $80 for a 4 week bookbinding class. Fun fact about me that I don’t share with many people– I can hand-bind leather books. Okay, I share that with you because I need you to understand that it is VERY normal to charge for your experience.
If you’re teaching someone a faster/easier way to do things than to spend months googling the answers, you are actually SERVING them and people are more than happy to pay for the time you’ll save them (I am one of those people!). Now, some people value money more and will spend the weeks and months researching how to make the perfect sourdough bread loaf, for example. And then others– like me– will just go buy an e-book on sourdough basics 101 so I can have all the information in one place and hit the ground running ASAP.
And that is EXACTLY what we’re talking about here– compiling all the information, resources, education into ONE place so that you can save people TIME and EFFORT. You are making their lives EASIER. You are SERVING THEM.
One issue you may run into is that you’re just flat-out NOT passionate about your current business niche. And that’s totally normal and okay! I sold baby headbands for crying out loud and I sure as heck had NO desire to create a sewing course or anything similar. In fact, I probably would have benefitted from a sewing course because I’m not particularly talented in that area, although I did make it work for my Etsy shop.
But I had NO particular interest in sewing. Or teaching that skill to anyone else. But I DID have an interest in marketing– something that I had refined over the 18 months I had been selling on Etsy at the time. And it was something that I was good at. And here I am just a couple years later with over $1 million dollars in online course income to show for it.
So maybe you’re an incredible baker. Or an expert gardener. Or a killer budgeter. Or an amazing baby sleep trainer in which case, where were you 2 years ago in my life?!?!
Regardless, those are ALL topics that are just waiting for incredible digital education products to be created around them. And created by YOU. And YOUR unique perspective and talents and experiences.
So don’t ever use the excuse that creating passive income just doesn’t work for YOUR shop– because I’m not buying it 😉
Myth #3: I’m not capable of the tech-aspect of creating a digital education product
So this is another 100% a mindset issue– believe it or not, as Marie Forleo says, “Everything is figureoutable.”
I want you to think back to when you FIRST started selling on Etsy– chances are that you were a bit overwhelmed, right?! So many buttons and tabs and things to name and categorize. When you’re just getting started– I don’t care WHO you are– it’s A LOT to take in and have to learn and those early days are long and challenging.
And while it may seem like passive income and digital education products are incredibly overwhelming as you’re learning — like what format do you present them in? How do you deliver the digital product? How do you record and/or create content for it?
Know that those things are only overwhelming NOW because they’re new– and you’re just a couple months away from things becoming old hat and second nature– you’ll be a pro– just like you are on Etsy– before you know it!
So don’t EVER let the tech side of things stop you from going after your goals. If passive income is something you want to build into your business model– and I STRONGLY encourage you to do so– then you will be able figure it out…and probably kick yourself later for why it took you so long to in the first place!