How Exactly Do Websites Make Money?

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When I tell people that I earn a full-time living by running profitable websites, I typically get a blank stare.

“How does that even work? How do websites make money?”

Great question.

I’ll provide a detailed answer in this post.

What’s a Website?

According to the Merriam-Webster dictionary, a property is a thing that belongs to someone.

You can think of websites as digital properties that people own.

Once someone owns a website, they can do whatever they want with it. For example:

(1) They might use it as a blog to share their personal thoughts.

(2) Or perhaps they use it as a place to upload funny cat videos.

(3) Or they may use it as a platform where they produce content and earn money from it.

Option (3) is how you can use a website to earn income.

How Can You Start a Website?

To start your own website, you only need to do two things:

1. Buy a domain name.

This is the name of your site. It’s what people type into their browsers to find your site. For example, the domain name of this site is fourpillarfreedom.com.

You can buy a domain name from a domain name registrar. There are tons of these online, but some of the more popular ones include:

• Bluehost
• HostGator
• Namecheap
• GoDaddy

To see if a domain name is available to be purchased, simply type in a name you have in mind into the search bar of any of these registrars and it will tell you whether or not the name is available.

You can buy most domain names for about $10 per year. 

2. Buy a hosting plan.

Once you own a domain name, you need to set up your website on a server so that other people can access it around the world.

The easiest way to do this is to buy a hosting plan from a company who will “host” your site for you online with their servers. Some of the more popular hosting providers include:

• Bluehost
• Siteground
• GoDaddy
• BigScoots

The cheapest hosting plans can be as low as $3 per month but can get up to hundreds of dollars per month if your site eventually brings in millions of visitors per month and requires more server space.

How Can You Upload Stuff to Your Website?

Once you own a domain name and a hosting plan, you can start publishing things on your website for anyone to see.

The easiest way to do is by using WordPress, a completely free software that allows you to create and publish content from scratch.

The nice part about WordPress is that they offer a variety of both free and paid “themes” created by professional programmers that you can use to modify the appearance of your site. I’ve personally made all of my money online using free themes.

How Can You Get Traffic to Your Website?

The way to actually make money is to get traffic to your website and then monetize that traffic.

There are four main types of traffic that any website can receive:

• Direct: This is when a reader directly types your domain name in their browser. Thus, they go directly to your site.
• Referral: This is when a different site refers to a reader to your site by linking to one of your articles.
• Social: This is when a reader finds your site on a social media platform like Facebook, Twitter, or Pinterest.
• Organic Search: This is when a reader finds your site by searching for a certain phrase on Google and clicking on an article you wrote that appears in the search results.

Of all four types of traffic, organic search is the best to receive because it has the potential for free recurring traffic.

You simply write an article one time, wait until it shows up on the front page of Google, then sit back and enjoy the traffic that comes to your site over and over again as people around the world find your article on Google.

The process you can use to receive organic search traffic is explained in detail in the tutorials within The Income Community.

How Can You Earn Money from Your Website?

Once your website starts receiving traffic, the final step is to monetize that traffic. There are three common ways to do so:

1. Place advertisements on your site.

The most common way that websites make money is through ads. The idea is simple:

• There are thousands of companies out there who want to advertise their product or service online.
• If your website receives enough traffic each month, these companies will be interested in placing advertisements on your site since they know people are looking at your site.
• By agreeing to place ads on your site, you can earn money based on impressions (people simply seeing the ad) and clicks (people actually clicking on the ads).

The good news is that there are plenty of ad platforms out there that will do the hard work of connecting interested companies with your website. Once you’re a member on an ad platform, they’ll place the ads on your site automatically so you can sit back and receive a direct deposit each month based on your ad revenue.

2. Place affiliate links on your site.

Another common way that websites earn money is with affiliate links – links that you place on your site that points to certain products or services. If a reader clicks on that link and proceeds to sign up for that product or service, you get paid a commission.

3. Sell your own digital products.

Another way to earn money from your site is to create and sell your own digital products. This includes things like:

• Downloadable templates
• E-books
• Online courses
• Custom software

This way of earning income offers massive upside if you’re able to create a product that readers in your niche actually want.

Reasons to Start a Website

There are several good reasons to start a website, including:

1. Websites offer a faster path to passive income than traditional investments.

Websites offer one of the few ways to actually generate passive income outside of traditional investments like stocks and real estate. Once you have enough articles that appear on the front page of Google, you have a way of bringing in traffic and income over and over again in a completely passive manner.

One site that I own – Statology – earns $1,500 each month purely from ads and 93% of its traffic comes from Google organic search. This means that each day there are thousands of readers from around the world that find my site on Google and read through my articles while I go about my day and earn passive income from the ads on the site.

This $1,500 in monthly passive income is equivalent to a $600k stock portfolio with a 3% annual yield. Both provide a total yearly income of $18,000 and both offer completely passive income.

The difference is that I was able to generate this level of income in just over a year with my website, while it would likely take over a decade to build up a $600k stock portfolio that could produce the same amount of passive income.

2. You can reach a massive audience with a website.

The way to make a lot of money in life is to help a lot of people get what they want. Fortunately, websites give you the ability to help billions of people around the world.

Consider the following scenario as an example:

As a senior in college, I used to make posts on Craigslist advertising my statistics tutoring services. I would frequently connect with people online who I would then tutor in person for $40/hour. This was a great gig, but unfortunately it had a couple downsides:

• My income potential was capped by the number of hours I was willing to spend tutoring each day.
• I had to actually provide a service in person; this wasn’t a form of passive income.

By starting a website and writing statistics tutorials, I was able to overcome both of these issues:

• With a website, I could help thousands of people from around the world as opposed to a couple people each week who lived in my area.
• I didn’t even have to be present to earn income from my stats knowledge; people simply found my articles on Google and I earned income from ads with each page view.

By providing a tutoring service, I could only reach people looking for help in my area.

By creating a website, I’m able to reach people looking for help all over the world.

3. The number of people using the internet is growing each year.

The number of people around the world who have access to the internet is growing each year, as research from Our World in Data shows.

• In the year 2000, about 412 million people had access to the internet.
• By 2010, 1.9 billion people had access to the internet.
• By 2016, 3.4 billion people had access to the internet.

As of today, only about half of the world’s population even has access to the internet. As this number grows by billions in the coming years, it means the audience you can reach will also grow massively.

Guess which websites will be at a huge advantage as the number of global internet users increases? 

The ones that are already around today.

The best time to start a website was 10 years ago. The next best time is today. We’re not even remotely close to peak internet usage worldwide.

Start your website today and reap the benefits for years to come as the number of people using the internet continues to increase by several billion over the coming years.

If you’re ready to learn how you can create your own profitable website from scratch, join The Income Community.

Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.