How to Monetize YouTube

How to Make Money on YouTube: 9 Ways to Monetize Your Account

IntroductionMaking-greenbacks-on-YouTube

Ever wonder how to make money on YouTube?

If so, you’re in the right place!

Before we dive into monetizing your YouTube account, let’s clarify a few things.

This article is intended for those who have an existing YouTube subscriber base and are looking for ways to monetize, or for those thinking about getting into the YouTube game and wondering how they will be able to make money.

We’re working on an article on how to grow a YouTube audience from scratch.  

In the meantime, check out our article on how content creators can build a successful online business (whether you’re a YouTuber, blogger, podcaster, etc.)

For more on how to grow a YouTube account, you can also check out Brian Dean’s fantastic YouTube SEO post.


Check out these crazy stats on how much YouTube stars are making these days:

  • PewDiePie, YouTube’s highest paid star, will pull in an estimated $15 million in 2016 (1)
  • Michelle Phan, known for her make-up and cosmetics channel, leveraged her 8 million subscribers to launch a subscription beauty business worth $500 million (2)
  • The top 10 YouTube stars earned a combined $70.5 million from 2015 to 2016 (3)

Want to get in on the action?

Who wouldn’t?

In our opinion, YouTube is one of the most exciting social media platforms on the market.

Why?

Because it has incredible passive income potential.  But that’s only part of it.

YouTube may be a video-oriented platform, but it’s also one of the few of its kind where the text matters (think video titles, descriptions and tags).

That means you can factor SEO, clickable links, and sales copy into your money making strategy.

That makes it one of the most versatile social media platforms.

Just for good measure, here are some more insane stats on YouTube itself:

  • YouTube has over 1 billion users
  • Every day it racks up billions of views
  • It reaches more 18-49 year olds than any cable network in the U.S., and that’s just mobile views (4)

So if you’ve ever wondered how to monetize this audience or how to make money on YouTube, you’ve come to the right place.

We’ve compiled a thorough list of monetization strategies – read on to learn more about them.

1. How to Make Money on YouTube by Selling Your Own Merchandise

how to make money on YouTube selling your own merchandiseHow much can you make? A good conversion rate for consumer products is 2%.  

Let’s say you’re selling a t-shirt that nets you $10 in profit per sale.  

Assume you have a huge and dedicated fan base that loves your brand, and you get about 100,000 views on a video promoting your t-shirt.  

Theoretically, that video could net you $20,000 (2% of 100,000 times $10 per sale) – not bad!  

Promote your product in all your videos to continue the cycle.

How it works:

This is the number one way to make money on YouTube.

In fact, a study by Printsome revealed that over 94% of YouTubers with over 1 million subscribers sell merchandise, which is a good indicator that it’s an effective strategy (5).

It’s the classic, tried-and-proven model:

  1. Build a captive audience.
  2. Sell a relevant product to that audience.
  3. Rinse and repeat.

Unlike ads or sponsorships, selling products gives you control of how much money you can make.

Rather than waiting for people to click on ads or brands to offer a sponsorship, you are actively marketing to your followers and generating revenue.

Plus, e-commerce is easier than it’s ever been, which makes selling t-shirts, mugs, hats, etc. a no-brainer.

Start by figuring out what your audience wants to buy.

Do they want t-shirts or sunglasses? Both?

Conducting market research before you launch anything is very important to make sure your product or store doesn’t flop.

A great way of doing this is by simply asking your audience what they want.

In your next video, ask your followers what kind of merch they would be interested in, or direct them to a quick survey linked in the video description.

Once you have a good grasp of this, the next step is to figure out how you’re going to manufacture your merch.

If that sounds intimidating or you’ve never manufactured anything before, don’t worry.

Thanks to drop-shipping sites like RedBubble, Teespring, Printful and Gearbubble (we highly recommend using one of these for the best quality and customer service), you can sell your product without ever having to worry about manufacturing or shipping.

Drop-shipping sites take care of all the logistics, and many will even set up a selling page for you.  

All you have to do is direct your followers to that page and get them to buy.

Disclaimer: be aware that using a drop-shipper usually means a slight drop in profit margin compared to manufacturing yourself. So if you’re more ambitious, find a trustworthy manufacturer and a reliable shipping strategy for better margins.

Next, you need to create an online store.

That means you’ll need a website, domain name, slick layout that converts sales, and a payment processor, among other essentials.

Sound overwhelming?

Thankfully, there are websites that takes care of all of this for you in a single package.

One of them is Shopify* which we strongly recommend if you already have a captive audience and you simply want an online store where you can direct them to purchase your merchandise.

We used it ourselves when we launched our line of Paleo-themed shirts, and it’s a great platform that integrates seamlessly with all the major drop-shipping platforms.  

If you plan on your website being more of a blog than just an online store, we recommend starting a WordPress with Bluehost web hosting.*

It’s simple to use and if you buy with our link,* you can get 50% off and get started for just $3.95 a month!

Once you have this set up, the final step is to market it to your audience.

As a YouTube personality, you should have no problem getting creative with your promotion.

Use your videos as opportunities to wear your branded shirts and sunglasses.  

Drink out of your branded coffee mug.  

Show off your branded stickers.

Just make sure to direct your viewers to your website.

If your product is something your followers want, and you have a reliable fulfillment strategy and optimized website, you can expect the sales to flow.

Best of all, you now have an opportunity to make money every time someone watches your video.

Who’s doing it successfully?

PewDiePie, YouTube’s most successful star, sells merch from his Shopify store, as does almost every YouTube star on the planet.

2. How to Earn Cash on YouTube by Selling Your Own Digital Informational Product or Service

How much money can you make? Unlimited.  Just like selling merch, a good conversion rate is 2% of your viewers (see the “How much money can you make?” section above to see a sample calculation of how this works).

How does it work?

Have a popular cooking channel?

Sell your viewers an e-book of your favorite recipes.

Do viewers flock to your videos for make-up tips?

Offer 1-on-1 consulting sessions via video chat.

Internet famous for pulling off dangerous stunts?

Host a webinar where you give an inside look into your mentality and the tricks you use to pull them off.

Selling an informational product or sevice is arguably better than selling merch.

Not only do you never have to deal with shipping and handling, but your inventory is also unlimited.

The possibilities are endless as long as you have a slick landing page (here’s an example of 12 great ones).

If you want to sell an e-book or downloadable product, we recommend Leadpages, which starts at $25/month.

If you want to sell premium video content, 1-on-1 consulting sessions, group classes, webinars or anything involving videos, we strongly recommend Yondo.

Yondo is an all-in-one solution for video commerce, which means they allow you to host everything on one website.  It starts at $27/month.

You can always build your own website, but if your passion lies with creating content, use Leadpages or Yondo to save yourself the unnecessary work.

Who’s doing it successfully?

Cornelia Grimsmo, a YouTuber with over 100,000 subscribers, sells a self-help e-book on training the mind.

3. How to Generate Revenue on YouTube through Creating an App

How much money can you make? Unlimited.

How it works:

Just like with merch and informational products, you can leverage your following to popularize a mobile app.

The possibilities are endless:

  • An Angry Birds-type game where you launch an image of your face instead of birds.
  • A sticker app with your branding (Kim Kardashian is killing it with this.  Want a digital sticker with her face on it? That’ll be $1.99 please).
  • A customized work-out scheduling app that includes your fat-burning secrets.

Anything you can come up with that your viewers might be interested in is fair game.  

The app itself can be monetized in several different ways.  

You can sell ads within the app, charge for the app itself or sell in-app upgrades.

The goal is simply to get the app to catch on with your followers.  

If it does, you have the opportunity to make money.

Who’s doing it successfully?

Kimoji, Kim Kardashian’s emoji app, is on track to bring in a jaw-dropping $2.8 million in revenue in 2016. (6)

4. How Promoting an Affiliate Product on YouTube Can Pay the Bills

How much can you make? Unlimited.  

A good conversion rate is 2% of your viewers (2 out of 100 viewers buy the product) and your profit is usually a bit smaller with affiliate products.  But it’s much easier to sell affiliate products than your own. Read on to find out why.

How it works:

Note: While there’s some controversy with using affiliate links on YouTube, we are in favor of it.  

As long as you’re adding value and properly disclose that you’re using affiliate links, we don’t see any reason to worry.  

Here’s a good guide for more information.

Selling affiliate products is different from selling your own product in that you can get started right now.

Rather than building your own brand, finding manufacturers and setting up logistics, affiliate links allow you to make money from products already on the market.

In other words, promoting affiliate links saves you the time and hassle of creating your own product.

To get started, sign up with an affiliate program for a product that your audience would be interested in.

For example, if you have a cooking channel, you might sign up to become an affiliate for a blender.

Once you’re approved, you’ll get a special link.

Post that link in your video descriptions and come up with creative ways to convince your viewers to click on the link and buy the product.

You get a cut of every sale that comes through that link (ranges from 4% to as much as 75%, depending on the product and the program).

This works best if you have a highly engaged subscriber base.

But!

Here’s a strategy for all you internet entrepreneurs who don’t have thousands of loyal followers but still want to make money.

First, read Brian Dean’s guide to Youtube SEO to learn how to get a video to rank.

Next, create a video reviewing a product you can become an affiliate for.

Make sure to include the affiliate link either in the description or in a link to your blog.

If you’re successful, your video will pop up any time someone searches for certain keywords.

More searches = more views = more clicks on your affiliate link = make $$.

Rinse and repeat.

 

Who’s doing it successfully?

FightMediocrity has a great video on how he uses affiliate links to make money on YouTube.

5. How Enabling Ads on YouTube Can Be a Successful Monetization Strategy

How much can you make? On average, creators make about $2 per 1000 views. (7)

How it works:

This is the easiest and most traditional monetization model.

Enable Google AdSense to play ads before your videos.  

You are paid every time a viewer either clicks on the ad (CPC model) or watches the ad for at least 30 seconds (CPV model).

So you can see that the level of engagement the viewer has with the ad is important when it comes to how much you make.  

That’s why making money with ads is not as easy as it sounds.

Case in point: how many viewers use ad block software and never see the ads in the first place?  And of those who do see ads, how many bother to engage?

We like YouTube ads because they’re a nice passive income stream, but for most people, they won’t be enough on their own.

As a solution, we recommend taking a good look at all the strategies in this article and diversifying your revenue streams.

That said, ads are far from useless.

Here’s a fantastic excerpt from a guide by Video Power Marketing on how to target keywords with high CPC’s to make more money with fewer views:

“Understand this, Certain KeyWords Pay More than Others.  Advertisers will pay more for the keyword, “home mortgage” (CPC $17.63) than “cheap phone cases” (CPC $1.38) because the end return is a lot higher.

If someone ends up closing on a home loan that could make them upwards of $5,000+, whereas the end return on a cheap phone case would only be $15.  

Would you rather get paid from a phone case video that gets a million views with a CTR of 0.01% or a home mortgage video that only gets 10,000 views with a CTR of 0.08% ?

Consider the scenarios below with the given keywords and their cost per clicks.

Scenario 1 You make a video reviewing the new iPhone that gets 1,000,000 views, of which your ad Click Through Rate (CTR) is 0.1%.  

Meaning 1,000 people clicked the ad.

If the CPC is $1.38 the total advertising dollars made would be $1,380.

Google keeps around 45% making your payout $759.

This gives you $1 per 1,317 views.

Scenario 2 You make a video teaching people about home loans that gets 10,000 views, of which your ad Click Through Rate (CTR) is 0.8%.  

Meaning 80 people clicked the ad.  

If the CPC is $17.63 the total advertising dollars the total advertising made would be $1,410.

Google keeps around 45% leaving your payout $776.  This gives you about $1 per 13 views.

These scenarios are exaggerated to show the point.  

The money you make on YouTube has more to do with what advertisers pay for than how many views you get.

This knowledge is essential is to make the most amount of money per view.  

If you have a very targeted niche that contains high CPC keywords, you don’t need millions of views to make money.  

Getting a couple hundred views a day could bring in a couple hundred bucks a month!

Who’s doing it successfully? Just about every YouTuber on the market. 

7. How Getting a YouTube Sponsorship Can Make You a Pro YouTuber

How much can you make? Anywhere from 2 figures to 5 figures per sponsorship, depending on how many subscribers you have and how big your reach is.

How it works:

Once your channel is big enough, companies may approach you to get their product or brand featured in your video.

Or you can use sites like IZEA and Famebit to proactively connect with potential sponsors.

Most companies will ask you to briefly talk about their product in one of your videos, or create an entire video around the product.

If you have a sizable subscriber base (10,000+), this can be a great way to rake in cash.  

Be aware that too many sponsorships can also kill your channel.

Think of your channel as a brand and be selective with which companies you do work.

Some companies like CocoWhite and Sugar Bear Hair are notorious for sponsoring anyone willing to give them a shout-out.

Agreeing to work with them could make your brand look spammy if you don’t have a fitness or health-oriented channel.

To be clear, we love sponsorship as a monetization strategy – it’s how you’ll make most of your money if you’re not selling your own product.

Just make sure to prioritize your brand for the sake of the long-term profit of your channel.

Who’s doing it successfully?

With the rise of influencer marketing, find any YouTuber with over 10,000 subscribers and chances are they’ve worked with a brand.

A good example is gaming comedian W2S’ sponsorship with Samsung.

8. How to Monetize Your YouTube Account by Going On Tour

How much money can you make? Unlimited.

How it works:

This only works if you already have a massive subscriber base (at least 100,000).

If you do, you can build a live tour around the theme of your channel.

For example, if your channel revolves around lipsyncing, you can organize a tour by booking venues and letting your fans know you’ll be doing a live show in their city soon.

If you have a fitness channel, you can host live work-out sessions.

And if you’re famous because you’re good looking, well, you have a large number of options.  All you really have to do is show up and fans will flock to your event.

Who’s doing it successfully?

RoosterTeeth, a popular video game sketch comedy show, did a couple million dollars in ticket sales from a three-day event in 2015. (8)

9. How Starting a YouNow Channel is a Perfect Pair for Your YouTube Account

How much money can you make? In 2015, YouNow stars were making as much as $10,000 a month. (9)

How it works:

By now you’ve probably heard of YouNow.

If not, it’s the live streaming platform YouTube stars are flocking to.

It’s different from YouTube in that the focus is on a live, real-time experience.

So if you’ve built a loyal fanbase on YouTube, you can connect with them on YouNow, where you can conduct a Q&A or just hang out.

The best part is, you can make good money.

You make money on YouNow when your fans buy virtual goods during your stream, like highlighted chats or channel boosts (yes, fans can pay to make your stream more popular).

Or they can simply leave a tip.

YouNow takes a 30% cut, but making money as a YouTuber doesn’t get simpler than this.

Think of this strategy like accepting donations for your blog.

In your next YouTube video, let your followers know you’ll be live-streaming on YouNow at a future date.

Then let us know how much money you made.

Who’s doing it successfully?

KingBach, who has over 1 million YouTube subscribers, regularly hosts YouNow streams.

Conclusion

Opportunities to make money on YouTube are versatile and diverse.  To recap, you can:

  1. Sell your own merchandise
  2. Sell a digital informational product
  3. Create an app
  4. Promote an affiliate product
  5. Enable ads
  6. Get sponsored
  7. Go on tour
  8. Start a YouNow channel

We suggest using as many of these monetization strategies as you can to maximize your revenue.  

Some options, like enabling ads, may not be enough on their own.  

But combine it with selling your own merchandise, for example, and you just might be able to create a full time income from YouTube.

What do you think?

Did we fail to mention some ways to make money on YouTube?

Let us know in the comments!

The Author

Matt Tsai

References

  1. http://www.forbes.com/pictures/gjdm45ffed/1-pewdiepie/#2ff0bb099f1a
  2. http://www.forbes.com/sites/natalierobehmed/2015/10/05/how-michelle-phan-built-a-500-million-company/#1c432bc44a99
  3. http://www.forbes.com/pictures/gjdm45ffed/streaming-celebrities/#6c77c2cd3332
  4. https://www.youtube.com/yt/press/statistics.html
  5. https://www.printsome.com/blog/2016/youtube-merchandise/
  6. http://qz.com/727610/apples-creating-a-new-sticker-economy-and-kim-kardashian-is-going-to-dominate-it/
  7. https://medium.com/@hankgreen/the-1-000-cpm-f92717506a4b#.kstg82e0c
  8. https://www.bloomberg.com/news/articles/2015-07-29/youtube-stars-go-on-tour-betting-social-media-can-sell-tickets
  9. http://www.usatoday.com/story/tech/2015/05/14/teens-flock-to-younow/27321135/
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