Pat Flynn had a job he loved in an architecture firm. Then he got laid off. Not sure what to do next he started looking at a website he had previously created to help himself and co-workers pass a test required for work. What he found surprised him. The website was being found and viewed by 1000s of people around the world. He decided to write an e-book to sell on the site. The first month he made over $8000. Today he makes over $50,000 a month.
Here is a bit of his story.
How passive is the process of earning passive income?
I have my foot in many pools. The money I am making now is from stuff I have already done. My site greenexamacademy.com, is a site where people can buy an e-book to help pass an exam that I have experience passing. After they purchase the book it gets automatically delivered to them. I do not have to be there for the transaction to happen. I literally spend less than an hour a month on that site answering customer emails. But I have even eliminated a lot of the email questions by setting up a FAQ. It is not 100% passive, but one hour a month for $5000 to $8000 monthly is pretty passive I think.
My work depends on what I am focusing on. For a while it was iPhone apps. I get $5000 to $6000 a month on the iPhone apps. There is no work or upkeep required for those. Most of my income now comes from work I do on the Smart Passive Income blog.
The purpose of the blog was not to make money, but to share what I was doing on my other passive income blogs. I also have a niche site on training security guards. I do maybe an hour or two a month of work on that site which involves tweaking ads and monitoring stats.
The majority of the work I do is with the Smart Passive Income site and that is because I have a huge community there and they are expecting to hear from me. I love to write blogs posts which take a lot of time as you know.
In a sense what I do is passive because a lot of what converts for me are the affiliate links. In the middle of the night someone can make a purchase on an affiliate link on my site and then I wake up in the morning and I see the income from that.
I also do podcasts and YouTube videos. These are things I like to call planting seeds. I am doing work for the future now. Right now I spend most of my nights writing a book that I am going to sell on Kindle.
Could you talk about the main influencers you use to get traffic to your websites?
I started greenexamacademy.com in 2007. I started it to keep track of notes for an exam I was taking. I never had intentions of sharing it with anyone except for co-workers. When I got laid off I decided to see what I could do with that site. If you know a little more than someone else you can be considered an expert and they can possibly pay you to learn about whatever it is you know about.
I had the site up for a year and a half already when I decided to write the e-book. I had not looked at it much because I had passed the exam but when I did I saw that 1000s of people around the world were viewing it. I had no idea that was happening.
I had written so much content on it while I was studying. I was spending two to three hours a night writing for it when I was studying for the exam. Google ended up loving that site because I had so much content which allowed me to show up number one in search results whenever someone typed in a keyword related to the site.
Word of mouth also helps in getting traffic to the site. A lot of people that were talking on architecture blogs were talking about my site. Once the e-book was created I made $8000 in the first month, but I always make sure to say that although the first month I made $8000 that was not the first month the site was live. The site had been up for two years at that point so nothing happens over night.
With Smart Passive Income a lot of the traffic comes from podcasts. Podcasts are the number one way people learn of me and my brand. I did a survey last year with 4000 people and learned that 19% of people find me through the podcasts. That is not the top traffic generating site, but it is the top way people learn of me. The number two way people learn about me is YouTube and then the number three way people are learning about me is from links from other sites, then Google and social media. I think that is interesting because most people spend most of their time doing SEO and social media marketing when that was not even in the top three of how people find me.
The source I get the most traffic from is Facebook, but the interesting thing about that is that it is about 90% of my visitors are return visitors. Twitter has been good for generating traffic to my site as has Google. It means people are coming back which is good. It means I have stuff they want to continue to learn about.
For securityguardtraininghq.com it was my first attempt at link building and forcing my way to the top of Google in 73 days. I documented this on nichesiteduel.com. A friend of mine challenged me to do a niche site from scratch and we decided it would be fun to share everything we did and now the site has been number one in Google for security guard training and the many security guard related words for the most part for the last two years and it has been making about $2000 a month solely off of Google Adsense.
I find Google Adsense to be ineffective until a certain amount of traffic is achieved. Do you find there is a tipping point in visits, visitors or page views where Google Adsense starts to recognize real revenue?
It depends on the site. I agree that a lot of people put Google Adsense on their site and they do not get a lot from it. I believe it is when it gets to the point where you have people on your site that are sharing your site for you that things start to change. That is when you can tell you have something great and that is when typically a lot of great things happen. Not only are you shared but then Google starts to pick up on it and you start getting traffic as well.
Once you get traffic to your site, then it is about how you are getting conversions, what your click through rates are and that has a lot to do with the design of your site and the actual Google Adsense ads that show up, which you do not have a lot of control over.
Ad placement also matters. Some quick tips I like to include are to place one or two Google AdSense blocks above the fold. I like to use the text only links. A lot of people like to use the image ads because they look better, but a lot of people nowadays are trained to look over those things. The best thing to do is test. Try different things. Try matching the color of the ads with the colors of your site and see if that works. If that doesn’t work try using the opposite color. The best converting spot for me is a large rectangle on the right with text wrapping around it on the left side with the text ad links. That has always worked really well for me.
In your income reports you indicate you recognize significant advertising income as a result of having direct relationships with advertisers. Do you have any tips for how other bloggers or website owners can set themselves up for success in those situations?
You will either have an idea of what kind of companies might want to advertise on your site or if you are unsure you can do Google searches and see what companies are already paying for particular keywords. This helps you understand what companies are paying money to get traffic to their site.
You want some kind of targeted traffic to your site or the advertisers will not be interested. If you have that traffic you can contact advertisers. When you contact them you want to appear very professional and not waste their time. You should tell them that you are the owner of your site and provide them information on where you rank, how much traffic you get and the offer you have for them to advertise on your site. The best thing to do is have a PDF where you show the specific places you can have advertising on your site. It is sort of a media kit where you can give a history of your company and tell potential advertisers a little more about it. You can give Google Analytics screenshots to show them why they should advertise on your site.
You can go to Quantcast and get general information about the demographics of your site to give to potential advertisers. Advertisers are interested in demographic information because they want to make sure they are giving money to a demographic that meets who they are targeting. It is about giving advertisers as much confidence as possible that if they put advertising on your site it will be beneficial for them.
Do you have any recommendations on pricing structures for advertising?
At first I was charging $50 a month and then I was charging $100 a month. I would also do things such as if they signed up for two months I would give a month free or if they did it for six months I would give them two months free.
I am curious about your thoughts on e-book pricing. I think when people are selling their e-book for $1.99 – $2.99 it might actually hurt them. Do you have any thoughts on that?
If you are selling through your own site you are undercutting yourself very much. I guess it depends on the goal for your book. If the goal is to make money you want to mess around with the pricing, so you sell it for what it is worth. When I first launched my e-book I launched it for $19.99 which was much less than anybody else who was selling a hardcover book but nobody else was doing an e-book, so I did not know how much somebody would be willing to pay. The exams cost $300 to take so an extra $20 was not a lot more to pay to help you pass the test.
The first month I sold around 300 copies which was great. During that month I had a customer who was the president of an architecture firm email me. He said he loved the book and it had helped him very much, but from business man to business man he told me that I was pricing it way too low. His exact words were, ‘I will punch you in the face if you do not raise this price.’ I didn’t want to get punched in the face. [Laughing] I raised the price to $29.99.
I ended up selling more copies. It blew me away. The perceived value of the book went up. I think $19.99 seemed like not as much of a value; like something that was just thrown together that would not have helped them as much.
If your goal is to get more eyes on your brand then it would make sense to put it on amazon.com because that is where people can find you that don’t know you. The Amazon Kindle pricing model forces you to price e-books between $2.99 and $9.99 because Amazon knows that is the hot price for selling Kindle books. If you sell between $2.99 and $9.99 they give you a 70% royalty, but if you sell above or below that they give you 30% royalty.
Do you have any concerns with e-book piracy? Are there any precautions you take against that?
That is a great question. That is something I do not worry very much about. There are ways to protect your book through passwords, unique key identifiers and shipping individual digital books that have a key to match the email addresses, but it is such a hassle to the legitimate buyer that I don’t think it is worth it. There are some people who will try and get it for free and that is fine. Karma will come back in one way or another I feel. There are a lot of people who will buy it legitimately and I think you should make it easiest for them.
I don’t think you should just give it away, so I think it is good at the beginning and end of the book to find a way to say that you have worked really hard on the book and you would appreciate it if they knew somebody who would benefit from the information to please send them your website or to Amazon so they can download the book legitimately. Some people do not know they should not pass along e-books. If you remind people and are nice about it people will want to help you.
Is there an affiliate service you use or do you partner with each affiliate individually?
Some I go through individually and some I get through a service called ClickBank. There are some people whose courses I promote and they are sold through ClickBank, so I only deal with them through ClickBank. For Bluehost and Market Samurai they have their own affiliate program and I work with them individually. If you go to Bluehost, which is my domain and hosting service, you can click on the affiliate link and become an affiliate. You do not even have to be a customer, but in my opinion you have to actually use a product that you promote because you have to make sure that that product is something that is going to help your readers. You owe them the favor to be in a position of customer service if they have any questions about the product. You want to help them achieve something so you should be a resource in regards to that product.
One of the things I like to do with products is what I call ‘Unbox the Mystery’. I like to share everything people need to know about a product before people buy it. People want to know what they are buying before they buy it especially online. I walk people through how to use Bluehost when they get it. I start at the point of how to sign up and walk them through how to make a website. That video converts to a lot of sales and I earn a good commission off it.
It is a win-win, people learn what they are buying before they buy it and how to use it once they get it and of course I get a commission too. I am always upfront and honest about affiliate links and income. Some people think they do not want to tell readers that they are making money because they will not want to buy from you. I think you should tell them, so they do not want to buy from you and they will thank you for the help you have given them.
Right now you have one full time virtual assistant and one part time virtual assistant and that is your only staff.
Yes. This might sound corny, but I also think my audience is part of my staff because they are always pushing me and giving me ideas of what to do. I have certain things set up so I can get direct feedback which I love. A lot of people tell me when I spell something wrong or have made a mistake which I also love. I consider my mastermind groups to be a critical part of my team. It is a way for me to meet with other people in all different niches of online businesses. I get different information from all different angles. I can share what I am up to and I can get direct and immediate feedback. It was a mastermind group that told me to publish an e-book and that is the same e-book that made $8000 the first month.
What advantage do you gain by publishing your monthly revenue reports?
I think the advantage is that no one else is doing it. My whole philosophy is being open, honest and upfront. I think if people are investing in my knowledge then I owe it to them to show my reports. Then people can make educated decisions about what is best for them. A lot of people see the numbers and get inspired by it. I am a regular guy. I am just really good at taking action and my goal is to get other people to take action.
Beyond the numbers what is more important to me are the lessons that go along with those numbers which I also include every month. I talk about what is going well, what did not go so well and what I want to do in the future. I think that inspires people too. They get an over the shoulder look about what is going on.
Anything else you would like to add?
The best thing to do is to take bold actions. Do amazing uncomfortable things that will take your business and even your life to a whole new level. A lot of people work for works sake but do not really get anything accomplished. A lot of people do things to feel like they are getting somewhere but they are really not. I always encourage people to take the time to realize what they are doing and to understand how that is helping them meet their goal.
I remember an exercise in the Four Hour Work Week by Tim Ferriss. He had an exercise in that book that was to go to a public space and just lay down on the ground facing up and just lay there and let people walk by you. It is the most uncomfortable thing you will ever do. His point was that you have to put yourself in uncomfortable situations. When you are starting an online business you are going to be doing uncomfortable things, but it is those uncomfortable things that take your business to the next level. For me I was extremely uncomfortable in front of the camera when I started my YouTube channel. That was a big struggle. I was also extremely uncomfortable behind a microphone. I would say ‘um’ all the time. I was terrible at interviews but just by putting yourself out there you are only uncomfortable for a little bit until it becomes second nature.