How to Make Passive Income from Online Courses

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Selling online courses is one of the most realistic ways to make passive income online.

Contrary to popular belief, it’s relatively simple and inexpensive to start selling online courses. To begin selling online courses all you need is yourself, a simple website, and a topic that you can teach.

In this blog, I’m going to tell you why you should sell online courses and I’ll show you exactly how to make passive income selling online courses (it’s easier than you think).

Why Online Courses

In my opinion, an online course is the easiest way to generate substantial passive income online. Whenever I meet with new entrepreneurs, I recommend online courses as a viable revenue stream. Whether this is your main source of revenue, or one of the many revenue streams generating income for your business, you should sell online courses.

Below, I’m going to give you three reasons why you should sell online courses.

1. High-Value Product

Would you rather sell one online course for $500 or hustle to sell 50 copies of your $10 eBook?

For the same result, I’d rather work hard to sell one $500 course. Getting sales is hard, maximize your effort by selling a high-value product or service.

That’s why I love online courses. It’s a premium product; you should be charging a minimum of $200 per course (my courses sell for $400 each). Sell five online courses per month and you have a legitimate side hustle going. Just five sales. That’s easy!

2. Passive Income

Online courses are my favorite form of passive income. You put in the hard work upfront, building the course and setting up the sales funnel. Then reap the rewards of recurring passive income for the rest of your life.

Not a bad deal! A few weeks of hard work creating the course, and in return you receive a lifetime of income without lifting a finger.

3. It’s Easier Than You Think (and Cheaper Too)

Contrary to popular belief, starting an online business and selling online courses is easy and cheap. All you need is an idea and a little hustle to get the business off the ground. My online courses that now generate a minimum of $5,000 per month in recurring passive income cost me $50 to start. You can do this for cheap. You can make money online with an investment of $50 or less. All you need to get started is an idea, web hosting and a domain name (which you can get for $2.95 per month from Bluehost).

In the subsequent sections of this blog post, I’ll show you exactly how to get started selling online courses. I will show you just how easy it is.

My Journey Selling Online Courses

I sell online courses in the insurance industry, on my website AssociatePI.com. My online courses help employees in the insurance industry pass their eight exams to earn the Chartered Property Casualty Underwriter Certification. My courses are entirely text-based, self-hosted on my WordPress website using the WPLMS theme, and took me no longer than one month to write each course.

I sold my first online course in June of 2015, a sale of $550 for two of my online courses. It was the first time I had ever sold anything online. I’ve since generated nearly $200,000 selling online courses. See the screenshots from my Stripe account below.

This year, I am averaging around $7,000 in monthly passive income from my online courses at AssociatePI. On pace to surpass $80,000 in annual income just from online courses, and I don’t spend more than three hours per week managing the business at AssociatePI. Just three hours per week answering support emails. And that’s it. All I do is answer emails, the rest is completely automated and passive.

You can do this too. You can create online courses in your niche, in any niche for that matter, and make thousands in recurring passive income every single month.

How to Get Started

Getting started selling online courses is easy. All you need is a niche and a website. Find a topic where you have some expertise, find a topic you can teach, and create an online course.

The opportunities are endless.

Did you pass your CPA exams? Perfect, you can create an online course with study material and tips to pass each CPA exam.

Did you follow the Paleo diet and lose 20 lbs? Excellent. That can be your online course. You can create an online course about how to cook and follow the Paleo diet to lose weight.

Are you a productivity expert? Great, you can create an online course to help others manage the clutter in their lives to maximize their productive hours within the day.

The opportunities truly are endless. You will find hundreds of thousands of people online looking for your help, looking to purchase your online course. To give you some inspiration, check out what Ryan Levesque is doing with a website about orchids. He’s making $25,000 per month selling online courses about how to grow orchids. Orchids of all things! If he can make over $25,000 from a website about orchids (using this same process I’m going to detail below) you can make $25,000 selling online courses in your niche.

To make it even easier, I’m going to share a simple straight forward five-step process to get started making passive income from online courses. This is the process that I use when launching a new online course. The process is simple, I’ll summarize it below and walk you through step by step.

Step 1: Choose a Subject

First, you need a subject for your online course. It needs to be something that people want to buy.

If you already have a website, subscribers, or a social media following that’s great. Figure out what online course they want to buy. I do this with one simple survey question. I ask my audience, “what is the #1 biggest challenge that you are facing in regards to X?”

For The Entrepreneur Ride Along, my entrepreneurship website, I asked this exact question. I asked, “what is the #1 biggest challenge that you are facing in regards to starting and scaling your business?”. I learned a lot from this one question.

Most importantly, I learned that my subscribers fall into one of two buckets. They either want to start a business but have no ideas, or they have a business but no sales. So, I started two group coaching programs that I will turn into online courses. One to help people start their first business, and one to help people drive traffic and convert leads into paying customers.

For AssociatePI (my insurance online course website) I asked this same question. I asked, “what is the #1 biggest challenge that you face when studying for your exam?”. Once again, I learned a lot from this question. I learned that people were struggling to retain the information that they study, the study material from my competitors is dry or boring, and it took too long to study. So, I created an online course that was designed for faster and easier studying, one that allowed students to pass their exams in less time with less studying.

Finding a subject for an online course is that easy. Just ask what people want to buy!

If you don’t have a website or a following yet, that’s okay. Now is the time to start. What could you teach? If you own dogs, you could create an online course for training high energy dogs. If you use Microsoft SQL Server in your day job, you can make an online course teaching people the basics of using the Microsoft SQL program. If you paid yourself through college without student loans, you can create an online course teaching your method of graduating from college debt-free.

What are you an expert at? What do you do on a daily basis that you can teach? That can be your online course. There are thousands of options out there. Thousands of online courses that you could be creating. If you just need some ideas, I recommend taking one of these six online business ideas for beginners that I wrote about. Take one of these ideas and run with it.

Once you answer the question “what are you an expert at?” and find a topic that you could build an online course around, go out and talk to your target market. Again, use the one simple survey question “what is the #1 biggest challenge that you are facing in regards to X?”. Go to Reddit r/samplesize, an entire subreddit where people answer survey questions, and post a survey to kick off your market research. Join Facebook groups and LinkedIn groups, start talking to your target market. If you want to create an online course teaching people how to train dogs, then go out and talk to dog owners and figure out what they are struggling with. Figure out if they have a problem that you can solve with an online course.

Talk to your target market, ask them questions. Your target market will tell you what they want to buy. But don’t build it yet! In the next step we will figure out if people actually want to buy your course.

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Step 2: Pre-Sell

Sell your course before you build it. This is called pre-selling. This is the most important part of this five-step process. If you take nothing else away from this blog, remember that you need to pre-sell your product or service before you build it, no matter what you’re selling.

A pre-sale means you’re selling your online course BEFORE you build it. You sell the course as an idea, at an extreme discount, to make sure that people actually like your idea and want to buy what you are offering.

This is the best way to validate your online course idea. Sell your course before you build it. If someone buys your product before you build it, then you know there’s a clear need for the product. Pre-selling can save you a ton of time and money before you dive in and waste months building a course that no one wants.

Once I complete step one, after I learn the #1 biggest struggle and the most common challenge that my target market is facing, I offer a pre-sale on my online course. I make sure they know that this is the course that will solve their #1 biggest problem. I offer the online course, making it available for sale before I even build it. I’m very open, I tell my subscribers that this is a pre-sale and they can buy the online course now at 75% discount because the course is not built yet. With this pre-sale, they get to be the beta testers and give feedback as I build it, ensuring that the course is exactly what they need to solve their problems. Then, once the course is built, they get full access to the course for life.

If I can get 5 to 10 people to pay me for a product before I build it, then I know I’m on to something. I know I’ve hit a sore spot and I know I’ve got an idea for something that people desperately want. Then I build it and deliver the product.

The true validation of an online course comes when someone pulls out their wallet and pays you for the product or service that you offer. I’ve seen far too many entrepreneurs (including myself) build online courses on a hunch without asking if anyone wanted the course, or without pre-selling the course. I know from experience, building a course without proper pre-selling and validation