This 33-year-old makes $14,600 a month in passive income: 'I work just one hour a day’ on my online business
In 2014, I was earning $85,000 a year as a full-time web developer. While I made enough to cover my living expenses, I felt like I was putting too much of my time into the job.
I knew that there were opportunities to make passive income in e-commerce. So in 2016, after experimenting with "dropshipping" (a business model in which sellers don't need to keep any products in stock), I came across a Reddit post that inspired me to start a print-on-demand side hustle.
Print-on-demand allows me to sell T-shirts while outsourcing the printing, packaging and shipping to a third-party vendor. By 2020, I made enough money to quit my job and focus on taking my side hustle full-time.
Today, at 33, I make an average of $14,600 a month in passive income from my print-on-demand business. The best part is that I work on it just one hour a day.
How I got started without a design background
My first T-shirt design was a poorly-drawn Loch Ness monster. I started out using Adobe Photoshop, but found it too difficult to navigate without any formal training.
Now I use All Sunsets, Creative Fabrica and Vexels to create my designs. These sites are great for print-on-demand sellers who don't have a lot of graphic design experience because you can download commercial-use illustrations, instead of making them on your own.
Membership prices for All Sunsets start at $59 a year, Creative Fabrica at $4 a month, and Vexels at $22 a month.
When coming up with designs, I research what keywords are popular among customers using the DS Amazon Quick View and PrettyMerch Chrome extensions. Sometimes I make shirts inspired by pop culture moments and upcoming events.
How I make passive income through print-on-demand
About 50% of my passive income comes from Amazon Merch on Demand, where I sell the most items. I like this platform because you don't have to pay money upfront for inventory.
The process is simple:
- Create a T-shirt design and save it as a PNG file (a high-quality graphic file format).
- Upload your artwork onto Amazon Merch on Demand.
- Choose the product type and add a description.
- Amazon then creates a 3D rendering of what the shirt would look like in real life.
- Amazon creates a product listing on Amazon.com, making the design available to buy.
- Each time a customer makes a purchase, Amazon handles production, shipping and customer service.
Amazon Merch sellers earn a royalty fee between 13% and 37%, depending on the product type and listing price. Amazon has predetermined listing prices that sellers can choose from.
My best-selling product is a standard T-shirt. I charge $19.99 per shirt and make a 26% royalty fee per sale, equaling $5.23 in profit. Amazon keeps the rest.
In addition to T-shirts, I sell my designs on hoodies, sweatshirts, mugs, hats and other accessories like stickers and phone cases. I always list my products to make at least a $5 profit per sale, but I sell larger items like sweatshirt at a $10 profit.
Another platform I use is Printful, which is similar to Amazon Merch on Demand and is an inexpensive way to get my products in front of more people. It prints, packages and ships designs that I list on eBay and Etsy. It costs $0 to list a design on eBay, and $0.20 to list a design on Etsy.
A little creativity and a lot of drive will take you far
During the hours that I'm working, I'm mostly creating new designs, listing products, and learning tools that will help me further automate my business.
I also started a YouTube channel and created online courses to share my knowledge. I want people to know that they don't need a degree in graphic design to succeed in the print-on-demand business. They just need a little bit of creativity and a lot of drive.
Ryan Hogue is a former web developer and adjunct professor who quit both jobs to run his e-commerce business. His YouTube channel teaches people how to earn passive income using "Ryan's Method."
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Want to earn more and work less? Register for the free CNBC Make It: Your Money virtual event on Dec. 13 at 12 p.m. ET to learn from money masters such as Kevin O'Leary how you can increase your earning power.