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Many people dream of YouTube riches in part due to high profile success stories like Ryans world (he reportedly made over $26 million in 2019). For us common folk, the question still remains, how do you make money on YouTube?
There are obvious ways but, those are the bottom of the totem pole. In this guide, I’m going to show you how to make a considerable amount of money from YouTube – even if you have a tiny channel.
Trust me, I know because I’ve made more from my small channel than people who are 10X larger than mine. I’m not even part of the YouTube partner program – yetJ.
Keep in mind that YouTube should be just one of the many business models you use to earn money online.
Let’s dive in.
How many subscribers do you need to make money on YouTube?
First, let’s clear the air. There’s no specific subscriber count that you need to hit before you’re rolling in the Benjamins.
Yes, the more subscribers you have the more money you CAN make but your earning ability isn’t dependent on your subscriber count.
It doesn’t work like “if I have 100K subscribers I’ll make 10K/m.”
Technically, you need at least 1,000 subscribers and 4,000 hours of watch time before you can make money directly from YouTube. There are also many other factors at play such as:
- The niche of your channel which determines how much the YouTube partner program pays you
- How engaged your subscribers are which will determine if they’ll buy what you’re recommending
- Your audience demographics which may influence how much money they have to spend
- Whether or not you’re addressing a problem with a high intent to purchase (online business, personal finance, weight loss, etc.)
There are many other factors that determine your earning potential. I just wanted to share a cross section to help you move beyond a focus on your subscriber count.
As I mentioned, it helps but it’s not the most important factor for your earnings because you can make 10X more with 10X less when you do it right.
Now that we know subscribers aren’t everything, let’s look at how to make the most of your time on YouTube.
10 ways to make money on YouTube
These strategies to make cash on YouTube are listed out in no particular order but I will be sharing the level of difficulty for each one. I’ll also share the potential earnings you can make assuming you have a channel with 10,000 subscribers and an average view rate of 10% for each video (over the course of a few weeks).
1. The YouTube partner program
The YouTube Partner Program is the first place people turn to make money from the platform. It’s well advertised and YouTube is unique because it was the first social platform to share revenue with its creators.
Instagram is also testing this model because it’s being plagued by lower quality content due to lack of incentives.
The requirements to join include having at least 1,000 subscribers and 4,000 hours of watch time. YouTube takes 45% of the ad revenue and you get the rest.
For new creators, this can feel like an impossible task for two reasons:
- It’s hard to get people to watch and subscribe to your channel when you’re new
- YouTube (though it denies it) gives more distribution to content that has ads enabled
In the grand scheme of things, the YouTube partner program for mature channels is usually less than 25% of all income.
There are notable exceptions to this like Graham Stephan. He earns roughly $300,000/m from YouTube ads alone and has been transparent about his journey.
According to Social Blade, he makes between $2,300 and $36,800 a month from his channel. This is a general estimate across all channels and doesn’t take into account his niche.
Earnings can fluctuate wildly depending on the topic of each individual video. Content related to business and finance makes the most while information related to lifestyle or entertainment make the least.
Potential earnings per video: $2 – $30
2. Affiliate marketing
Affiliate marketing is one of my favorite monetization methods online because:
- You don’t have to create products
- You don’t have to fulfill orders
- It’s not up to you to handle customer support or refunds
All you do is send traffic to relevant offers and get a cut of the revenue. Many people are reluctant to do affiliate marketing because there are shady people out there giving it a bad name.
They’ll promote products that suck and wait for it to fold. After they collect their commission checks, they move on to the next product to promote.
Affiliate marketing doesn’t have to be like that.
In fact, it’s a necessary service that helps people cut through the noise and find good products – when done honestly.
Shelby Church is a popular YouTuber that has well over a million subscribers. She makes a considerable amount of money from affiliate marketing.
The link outlined in the image above is one of the affiliate programs she’s promoting.
Your mileage will vary with this strategy.
Dedicated product review videos tend to make the most money from affiliate marketing.
Most channels aren’t focused on product reviews.
Don’t let that deter you. If your videos are all related to a specific topic and there’s a relevant product, you can promote it in every video. Just drop a mention close to the beginning and people will check it out.
For example, if you have a beauty channel and there’s a makeup kit you love, you can mention it in almost every video.
You get bonus points if you can negotiate a discount from the brand that gets passed on to your audience.
The most difficult part of affiliate marketing is finding the brands you want to promote.
Potential revenue per video: $2 – $100+ per video (note: earnings are hard to calculate because many programs will give you a recurring commissions EG software while others will give you pennies on the dollar EG Amazon)
3. Selling Merch
Merchandise can take many shapes and forms. I don’t want you think it’s limited to t-shirts and hoodies.
Yes, those can work but it’s not the end all be all. In fact, the most successful YouTubers with their own brands sell different kinds of products.
Shawn Dawson and Jeffree Star made millions of dollars launching a makeup collection called Conspiracy.
Yes, they have millions of subscribers and put on a great show to build anticipation. That doesn’t take away from what they accomplished.
Think about what kind of merchandise would appeal to your audience. Create something unique and reap the rewards.
Allow your quirky side to shine through with products like laser etched tweets.
Here are a few things that come to mind which you can pursue:
- Coffee mugs with interesting sayings
- Laptop skins/stickers
- Phone cases
- Branded electronics
- Private label vitamins or supplements
- Subscription boxes with your channel theme
This is more difficult because you’re in charge of product ideation, creation, fulfillment, and everything in between. It’s also more lucrative.
Potential revenue per video: $200 – $1000
4. Sponsored videos or product placements
Another common way YouTube creators make money is through mentioning products or prominently displaying them on their channel.
Brands are looking to tap into the trust and attention you’ve developed with your audience and are willing to pay. Of course, this is directly related to how many subscribers you have and the number of people that watch your videos.
The topic of your channel and how you express your views can play a big role in which advertisers will work with you and how much you can command.
Negative public opinion around a YouTube influencer can also impact the brands that work with them. Of course, they want to avoid that.
PewdiePie lost big when he posted a number of anti-Semitic videos. YouTube canceled his series and Disney cut ties.
Unless your content is family friendly (it doesn’t have to be made for the whole family though), you’ll lose out on many potential sponsors.
Just like with the YouTube partner program, your niche determines your earning potential. Finance and business earn the most while entertainment and related niches command the least.
There are two ways to go about making this strategy work for you:
- Find sponsors yourself
- Wait for sponsors to reach out to you
After you cross about 10,000 subscribers, sponsors will start to reach out to you. Before then, you may need to be more proactive.
These are rules of thumb. My sister started a YouTube channel and brands were reaching out to her when she had well under 10,000 subscribers.
Potential revenue per video: $400 – $1,000+
5. Sell your services
This is something few creators do and I’ll never know why. Depending on what you create content around, you’ll be able to charge hefty fees for services you offer.
That could be anything from marketing to relationship coaching. It doesn’t matter so much as the offer you present.
There’s something called a JET offer.
Your only job is to create an offer so good that people will jump at it. The major drawback of a service is that it’s hard to scale. I’d recommend this route to people who already do some kind of consulting, coaching, or offer a service.
YouTube will become just another acquisition channel.
Webris founder Ryan Stewart does this with his YouTube channel. He showcases his expertise on the platform and makes it easy for people to reach out to them.
At that point, their sales machine kicks in and they’re able to turn those leads into clients for the digital marketing agency.
The beauty of selling services is that you can have a tiny audience. As long as your insights are useful, people will trust you as an expert and want to take the relationship further.
You can also command considerably higher rates because it’s your time – not a product.
Potential revenue per video: $1,000+
Difficulty: 4/10 (note, this is assuming you need to make a new service. If you already have one then I’d put the difficulty at a 1/10).
6. Course sales
This is a common strategy YouTubers adopt when they’ve grown their audience to a certain point.
The challenge is knowing what to add to your online course and what to give away freely on YouTube. The truth is that you can have similar content in your course and on YouTube.
It’s important to go more in depth.
For example, I have a video about affiliate marketing for beginners on my YouTube channel. It’s been viewed thousands of times and it’s pretty comprehensive.
There’s no way I could cover everything a beginner needs to know in a single video. If I were to make a course then it would go deeper into every aspect of that video.
Another benefit of a course is curation. It takes a considerable amount of content to build a following on YouTube. That may result in related videos being made months apart.
Creating a structure for your material and updating it in the form of new content is valuable.
Potential revenue per video ($299 course): $600
- Graham Stephan
Memberships are a powerful way to get your most loyal fans to support your work. Sometimes they do it out of goodwill and sometimes you need to offer a few incentives.
The end result is the same, a recurring source of revenue that allows you the freedom to do what you love.
Subscribestar.com and Patreon.com are two websites that allow you to do this.
Patreon is a platform that allows your fans to donate to you either one-off or recurring.
The name Patreon is a play on the ancient custom present in societies like Greece and Rome. Rich patrons would sponsor artists, sculptors, writers, etc. and allow them to make great works of art.
In exchange, the one receiving the patronage would create work for the patron as well.
Our modern society has large enough audiences to support a creator so you’re not dependent on a single patron.
Instead, you can rely on many people paying small amounts of money. I’ve seen multiple popular YouTubers adopt this strategy.
Andrej Jikh offers a stock market tracker that is built using institutional data. That data isn’t cheap so his patrons pool money together and get access to exclusive information.
I recommend going this route if it’s difficult to monetize your YouTube channel in multiple ways or your ad CPMs are low. CPM stands for cost per mille and is how much advertisers pay for 1,000 views of their ad.
The next question is usually, what do I offer my subscribers?
There are many options here but most YouTubers go with more content.
- Behind the scenes
- Content that’s too explicit for YouTube
- Creative process
- Short courses
Really, it’s whatever your audience is interested in. There’s no limit here. It may be a good idea to send out a survey to find out what people are interested in.
Potential revenue per video: $10 – $100 (this is hard to say because you can charge anything you want and it’s a recurring subscription).
Crowdfunding is ideal when you have a larger project you want to get off the ground and there’s a tangible deliverable.
It’s also much more difficult because there are many moving pieces. The project you want to get funded also needs to have large appeal beyond just your YouTube audience.
Can you meet your funding goal based on their involvement alone? Of course but most people don’t have enough engagement to pull it off, you may be different.
The most successful crowdfunding campaigns on Kickstarter include:
- Pebble time – $20,000,00+ (it’s a shame the company went belly up)
- Kingdom Death: Monster 1.5 – $12,000,000+
- Travel Jacket (includes a phone charging pocket) – $9,000,000+
As you can see from the examples, you can launch almost anything through crowdfunding. Getting your campaign right is much more difficult.
You need solid product imagery, a video, a detailed description, interesting rewards, etc. There are agencies that help with this but they charge a few thousand dollars or a percentage of revenue generated.
I suggest you do your research thoroughly before you go this route. It takes more preparation than signing up for a few affiliate programs.
Some of the most popular crowdfunding platforms include:
- Causes (more for nonprofits)
Potential revenue per video: $10,000+ (note: this isn’t something you can do multiple times a month so the revenue potential reflects that)
9. License your content
This isn’t a common method people use to monetize their YouTube channels and that’s a good thing.
It’s not as saturated.
If you have popular content or authoritative content, you can license it out to different groups in exchange for royalties.
For example, if a video goes viral, many news outlets will want to pick it up. Usually, they just ask for permission before using it.
The thing is they’ll reupload it and earn advertising revenue from it.
Instead of giving permission without compensation, license it to them. That way it’s a win-win. You earn money and they earn money.
If you have no idea how to go about this process, there’s a helpful marketplace called Jukin Media.
List your content on the site and they take care of the other details. Anyone that wants to use it can pay the fee and get access.
Potential revenue per video: $49 – $1,000+
Difficulty: 5/10 (or 10/10 if you’re looking to make a viral video)
10. Fan workshops
The last monetization strategy for YouTube creators is also one of the most difficult.
Like crowdfunding, there are many more moving pieces and it usually requires participants to travel out of their cities to meet up with you.
There’s also the possibility of not turning a profit on the first few events because you unexpected expenses.
If you do get it right then you can make a considerable amount of money.
My suggestion is to run intensive workshops for a small private group of people that get direct access to you.
Keep them intimate and people will have good things to say about it.
You also have to charge appropriately.
A workshop lasts two or three days and it’ll take a considerable amount of time.
If you can’t charge $750+ per head then the economics may not be worth it.
Consider the following expenses:
- A space to hold the workshop
- Any supplies you’ll use
- Possibly one person to help out (depending on the size of the workshop)
They need to be baked into the price of the event ticket. If you have 10 person events at $750 a ticket then that’s $7,500 in revenue.
After expenses, you may be left with less than half.
It’s good money but that’s only possible if you price properly.
Potential revenue per event: $7,500 – 20,000
I’ve only scratched the surface of what you can do with your YouTube channel. The main thing is to consider all of your options because ad revenue may not be the most lucrative.
After all, people can download a YouTube video and watch it offline. If that happens, all your revenue just dried up – right?
Focus on one or two that make the most sense for you right now then move on to other strategies. Over time, you’ll be monetizing your YouTube channel in multiple ways and won’t be in trouble if ad rates suddenly drop.