Building Your Business Becoming an Owner 5 Online Businesses You Can Start With No Money By Brian Edmondson Brian Edmondson Brian Edmondson is a banking and online business specialist with two decades of experience working in the financial industry as an employee and an entrepreneur. Brian is the founder of the Bankruptcy Recovery Foundation, a regular contributor to Entrepreneur, and was a financial analyst and advisor at Merrill Lynch. learn about our editorial policies Updated on April 29, 2020 Share Tweet Pin Email In This Article View All In This Article 1. Drop Shipping 2. Affiliate Marketing 3. Blogging 4. Online Video 5. Information Products Putting It All Together Photo: ilyast/Getty Images The internet is the great equalizer. In business specifically, it has leveled the playing field. Anyone can start a money-making online business—anyone with a computer, that is. But here’s the thing: virtually no technical experience is needed. Today there are plenty of tools you can use to build an online business that makes the technical work a lot easier than it was in the past. You can also live anywhere you want, set your own schedule, and work as little or as much as you want, depending on how fast or big you want your business to grow. No business or marketing experience is needed either. It’s a truly democratic medium for entrepreneurship. Best of all, unlike a brick-and-mortar business, you don’t need a lot of startup capital. In fact, you can get many internet businesses up and running with no money at all because so many free services facilitate the possibility. For example, you can set up a website or blog for free using WordPress. Or you can leverage a third-party site like Amazon or eBay to sell goods with no inventory costs. You use their selling platform in exchange for giving them a cut of your sales. And this is just the start of the many available no-money e-commerce startup solutions. Let's consider five of the top ways to start an online business and make money online with little or no cost at all. Illustration by Ashley DeLeon. © The Balance, 2018 1. Drop Shipping The basic idea behind an online drop shipping business is that, as a small business owner, you don’t have to maintain a large inventory (or any inventory whatsoever) of products or handle any delivery to your customers. That eliminates the financial cost and risk of having a warehouse full of stuff you might not sell, and the hassle of arranging to send orders all over the country or the world. In fact, you don't have to manufacture or store any products at all. The only thing you have to focus on is marketing and advertising to find the customers and make the sales. Once the sale is made the rest is handled by others. Your only cost is the expense of marketing and advertising to acquire a new customer. Once that is done, you'll work with a company that specializes in drop shipping. Here’s how it works: You list products for sale on your website or a platform like Amazon, eBay, or Etsy. When one of your customers makes a purchase, you purchase the product from a third-party company (the drop shipper, usually a manufacturer or wholesaler) for a lower price. This process is as simple as forwarding the order from your customer, a process that can actually be completely automated. (Remember you don't have any risk here of buying inventory because the sale has already been made). Your drop shipper then sends the product to the customer. Easy enough, right? With drop shipping, you can offer a wide range of products, so the operating expenses for your business are super low. Note As you can see there is no risk on your part because you don't even purchase the product (at cost) until the actual sale is made! What are the downsides to the drop shipping business model? You have to find a reputable drop shipper you can count on to deliver to your customers. If an order is late or doesn’t go out—or a product is of poor quality—you get blamed, as your company is the one representing the product and customer experience. Also, because this market is so competitive, the margins—that is, the difference between the wholesale price and how much you can sell a product for—are lower, so this will be a high-volume type business to generate a serious income. But still, it is a worthwhile low or no-cost startup option. One way to stand out from the competition with a drop shipping business is to private label your products. This simply means you put your own label/brand on the products that the manufacturer is creating. That way you're not selling the same product brand and just competing on price; rather you can use your own brand and face less competition. Think about when you're looking at medicine at the pharmacy; the brand names sell for higher prices and people think they are different from the generic brands even though the ingredients are exactly the same. Consider these important factors when looking for a good drop shipping product. Anyone considering a drop shipping business should seriously consider leveraging Amazon.com to grow their business and learn more about becoming a profitable Amazon seller, because Amazon is an established marketplace that people already trust and has an existing customer base. Eventually, you should also consider having your own online store as well. Pros Requires very little startup capital No need to maintain inventory You can leverage established marketplaces with existing customer bases Cons You can be blamed for your drop shipper’s mistakes The market is very competitive You must sell a lot to generate a substantial income 2. Affiliate Marketing Affiliate marketing is somewhat similar to drop shipping but with some key differences. With this e-commerce model, you again don’t maintain an inventory of your own products, and you don’t have to worry about shipping products to customers. Basically, you pick a profitable niche for your online business, and then you find an affiliate partner who has products available in that niche. Some of the most popular affiliate sites are Clickbank.com, Amazon.com, and CJ Affiliate by Conversant (formerly Commission Junction). Between them, they offer just about any digital information product (like ebooks, audio files, video files) or physical product you can think of. Many big name companies and brands like Wal-Mart and Home Depot run their own affiliate programs. With affiliate marketing, you offer the products for sale, for example, on your blog or e-commerce website. Each product has a unique link that tracks back to your account with your affiliate partner. A prospect who clicks on the link is taken to your partner’s shopping cart for checkout. Once they buy, that purchase is recorded and you receive a commission. Commission amounts vary depending on the affiliate partner, but is generally 5 percent to 25 percent, or 50 percent or more with digital information products. As you can see, there’s little risk on your part and virtually no investment needed either. Just like with drop shipping your only costs will be marketing and advertising to drive traffic and generate the sale. The key difference between this and drop shipping is that the business model is even more hands off. All you have to do is provide a link for the customer to click on and the merchant handles everything; billing, order fulfillment, customer service, etc. All you have to do is handle the marketing to get your prospects to buy (through social media, email marketing, blogging, or whatever method you choose). But after they click the affiliate link, it’s out of your hands. You don’t have to ship products or handle any customer service questions. And you certainly don’t have to maintain an inventory. All you have to do is focus on paid and free ways to market your online business. Affiliate marketing really is one of the most "hand-off" types of online businesses you can start. Pros Low risk: No initial investment required Hands-off business model Cons You’re responsible for driving web traffic to the affiliate link (no traffic means no money) May need to spend money on advertising and marketing 3. Blogging If you have the expertise or a passion or interest for a subject, you're ready to start making money with a blog. With a service like Blogger (www.blogger.com), you can start up your blog totally free. You can also create your own site and secure your own hosting for a low price, which is generally the route I recommend, as many free blogging sites have restrictions on what you can say or do, including making money or advertising. You may think blogging is all about writing. And it can be if that's what you want to do. But written blog posts are just the start. You can post photos, videos, and links to other sites, you can even repost news and other articles… anything is game, really, as long as it relates to your niche. They key is that you want to post original content that is useful to your target audience and to post on a regular basis. That is the best way to get ranked in the search engines and to also get your audience to take action. What sort of content should you provide? Anything that is engaging to your prospect. How-to topics, top-10 lists, commentary on trends in your niche, tips and tricks articles—basically, you need to provide useful content. There's no shortage of ideas for your blog. You make money in a variety of ways with an online business blog. Google AdSense. Have you ever been to a website and seen an ad on it? Chances are it was an ad being run through the Google advertising network. These pay-per-click ads appear on your blog. Every time somebody clicks on an ad (which is supposed to be about a subject related to your niche), you make a few cents or more. Small amounts each time, but it adds up. This is extremely hands-off. You just need to get a code from Google, place it on your website - and the ads will automatically appear on your blog. Google will only show ads that are relevant to your blog so it's a good experience for your visitors and maximizes the number of clicks you get, meaning more income. Blog ad networks. You can also work with ad networks other than Google, like Blogads, and run banner ads on your blog. Same as Google Adsense ads, you place the code once on your website and when your visitors click on the ads then you get paid. In addition to banner ads, you can also run video ads on your site. In many cases you can make more money with blog ad networks, but they tend to only work with blogs that are getting tens of thousands of visitors a month or more; as opposed to Google Ads where you can start right away regardless of the amount of traffic you get. Affiliate marketing. You know this one already. You include links to products you are promoting as an affiliate and every time somebody buys the product, you get a commission. With a blog, you can integrate advertising with content to make it even more likely you’ll get the sale. For example, you could do a product review—which is useful content—and then include a link to buy the product under an affiliate link. Here are a few successful blogging tips to make sure people can find your blog—and will keep coming back. This is key to building a following and making your blog a profitable venture. You need to provide useful content in an engaging way.If your blog is boring or the information can be found everywhere else, nobody will read it. Don't hesitate to put your own personality into the blog. You have to post content on a regular basis. People thirst for the new, so make sure you put up articles, videos, or whatever consistently. It could one post per day or three times per week. Whatever it is, maintain the same schedule. A scattershot posting history means losing readers. Note At a minimum try to aim for one new post, video, or other forms of content a week. Be genuine. Yes, your blog is supposed to make money. But you can’t make marketing pitches all the time. Focus on useful content so that your readers come to know, like, and trust you. Then they will naturally click on your advertising or buy the products you recommend. In this era of the internet and social media, people are looking for authenticity. Do all of this, and you’ll attract the notice of search engines like Google, which are always looking to put sites with useful, relevant content on top of the search results. This is what content marketing is all about. You could start a blog in less than an hour. But it takes time to make money as you build readership, and only a small percentage of those folks end up buying your products. Pros Very low start-up costs You may work on your own schedule Cons May take a long time to begin making money Creating and posting content can be time-consuming 4. Online Video Have you watched a YouTube video lately? Of course you have! This is one of the world’s most popular websites, with more than 2 billion users watching hundreds of millions of hours of video each day. And it’s not all cats doing funny things, by any means. You can leverage YouTube’s reach to make money online. No, you’re not trying to create a viral video, so to speak, although if it does go worldwide and is seen by millions, that’s a good thing. Instead, you’ll be following a proven strategy for maximizing views of multiple videos on a regular basis. You’ll be creating useful content—something engaging that people want to watch. And it works in many, many different niches. It could be a how-to video or a talking-head video on a topic of interest for people in your niche—the sky is the limit. You make money with ad revenue. Your first step is to create a YouTube account and start uploading videos. Then you enable monetization on your YouTube settings. Basically, this gives Google the go-ahead to include short AdSense ads with your videos, which you've seen if you’ve watched a YouTube video. When viewers click on those ads, you get paid. Another opportunity to make money with a YouTube channel is through paid sponsorships. Build a large enough following and companies will be more than happy to pay you to promote or mention their products and services in your videos. Some tips to create professional-looking videos (no expensive pro equipment needed): You can use your smartphone or a simple video camera. But make sure the lighting is good so that everything in your video is clear and easy to see.Make sure the audio is clear. You don't want an air conditioning hum, construction noise, or other distractions.Use simple editing software like iMovie to put titles at the beginning of the video and to edit out any flubs. Above all, remember that your videos can be simple and don’t have to be slick. Just provide useful content and be engaging and interesting. Funny helps, too. And to extend the reach of your videos, be sure to post them on your Facebook business page, Twitter, your blog, and other channels. Let people know you’re in the video business now. In addition to ad revenue from YouTube videos, you can also use your YouTube channel to drive traffic back to your website, where visitors can read your product reviews, click on the ads on your website, or even get onto your email subscriber list—where you can make multiple sales with your email list. Pros You can use your existing smartphone or computer It works across several different niches Cons Creating and posting videos can be time-consuming It may take a while to begin making revenue 5. Information Products When you have an internet business, it doesn’t have to be about selling physical products. In fact, digital information products are one of the easiest and quickest ways to make money. There's no shortage of ways to create information products, but the most popular formats include: Audio: a recorded teleconference, interview, course, or some other spoken-word productVideo: a recorded webinar, a how-to, an interviewText: an ebook, an instruction booklet of some sort, a travel guide In each of these categories, you can really get creative and make any type and format of content, as long as it’s engaging and useful. No matter which way you do it, it’s passive income—money you earn while you sleep because you put these products up for sale on your website and a customer can buy and download them any time of day or night, automatically. All you have to do is check the sales periodically to see what topics or types of products are selling best so you can make more of those. Pros Can bring in passive income once you put the product on the market Can be a quick way to make money Cons Creating a product takes some upfront work and time You may need to invest some money initially Putting It All Together The trick with any online business is to make sure you’re in a profitable niche market. So be sure to keep an eye on trends, check out bestseller lists on sites like Amazon, and consider what people are discussing on social media. Note One thing to keep in mind is that you don’t have to restrict yourself to just one of these e-commerce opportunities. Start out with one and get it going. Then add new revenue streams as you’re able. That will grow your income and ensure that you have something to fall back on should one business start going south. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. eBay. "Drop Shipping." Accessed April 29, 2020. APS Fulfillment, Inc. "What Are the Disadvantages of Drop Shipping?" Accessed April 29, 2020. Red Stag Fulfillment. "The Complete Guide to Drop Shipping Fulfillment." Accessed April 29, 2020. The Home Depot. "The Home Depot Affiliate Program." Accessed April 29, 2020. Walmart. "Become a Walmart Affiliate." Accessed April 29, 2020. Acceleration Partners. "Affiliate Marketing 101." Accessed April 29, 2020. Monitor Backlinks. "The Ultimate Breakdown of Average Affiliate Commission Rates." Accessed April 29, 2020. WordPress.com. "Compare WordPress Plans." Accessed April 29, 2020. Google AdSense. "We Value Your Content." Accessed April 29, 2020. ProBlogger. "Make Money Blogging." Accessed April 29, 2020. Google. "How Search Algorithms Work." Accessed April 29, 2020. YouTube. "YouTube by the Numbers." Accessed April 29, 2020. YouTube. "Intro to Making Money on YouTube." Accessed April 29, 2020. Grapevine. "Build an Influencer Marketing Campaign That Works With Your Goals." Accessed April 29, 2020.