How I Make Money On YouTube
If I get asked one question more than any other on my YouTube channel or in person, it’s “how do you make money on YouTube?” The answer is fairly simple, but it’s also not the most comfortable thing to talk about, even amongst friends. We were all raised not to talk about money, and there’s a fine line between a genuine curiosity about this crazy Youtube thing and a not so polite inquiry about how much money I make. I do completely understand the curiosity, because, let’s face it, being a YouTuber is a totally bizarre and very recent opportunity. If I was a teacher or a insurance salesperson or a doctor, I wouldn’t get these questions, but I do recognize that there is a desire to comprehend more about this very 21st century occupation. I made a video about it on my YouTube channel HERE, and it was the hardest video I’ve ever made. I’m sure I didn’t do the topic enough justice, but I have a feeling there will be at least one more follow-up video to address the questions that are sure to come. This blog post isn’t that much easier to write, but I want to share what I know and what I’ve learned these past six years with you. As you read this post or watch the video, please take it in the spirit in which it was intended-to educate, to satisfy some curiosity, and to help those that are genuinely interested in making a living making YouTube videos. Yes, I love what I do, and yes, it started out as a hobby, but it has morphed into something so much more than I could have ever dreamed-an ability to still be at home full-time but contribute financially to my family’s expenses, to contribute toward our children’s college fund, and to continue to absolutely love what I do.
So how DO I make money making YouTube videos? Well, there are three main income streams available to me. I may oversimplify some of the concepts (mostly because I still don’t understand the math behind some of them), but there are great resources all over the Internet that can expand on what I will cover here.
Income Stream #1: YouTube Views
When I started earning money making YouTube videos, this was the only income stream available to me. In the first months of making YouTube videos, I didn’t make any money at all. But once I became a YouTube Partner, I was able to get a share of the advertising income earned from showing my videos. You’ve all seen a YouTube video, where there is either a commercial shown before or after a video, or there is an actual ad that pops up on the bottom of the screen during a video. Those are ads, and those brands have paid for the advertising space. Once I became a YouTube partner, I received a teeny tiny infinitesimal share of that advertising income. There is a very complicated algorithm that YouTube uses to figure out what that share is, but for the purposes of simplicity let’s just say that it’s primarily based on the amount of views I get per video. So at the end of each month, as long as I’ve met the minimum threshold of earning $100 in what they call AdSense, I get a payment directly into my checking account from Google.
Income Stream #2: Sponsored Videos
Now we get into the controversial/polarizing part of YouTube. Many people have very strong views on sponsored videos. Again, for the sake of this post, let’s just stick to how things work. Fairly soon after I started making videos, I would get emails from different brands and retailers offering to pay me to make a video about their product. For a long time, I refused to do those videos, mostly because I had never heard of the brand or product and didn’t see how my channel or my subscribers would benefit from hearing about them. Eventually, once my channel grew, I started hearing from larger, reputable brands. At that point, I decided that I would do sponsored videos on my YouTube channel, as long as it satisfied certain personal requirements. The most important of those requirements was that I actually had to like the product, followed closely by whether it was for a product/brand I already used and loved, or for a well-known company that I was always curious about AND that I felt my subscribers would enjoy learning about as well. The reason you will never see sponsored videos that are negative is because that’s just unethical. How can you take money from someone and then bash their product all over the Internet? Make sure you make it clear from the beginning in writing that you reserve the right to cancel the project if you don’t like the product.
I also made the personal decision to follow all FTC guidelines and disclose very clearly to my viewers that the video was sponsored, and even though I have received some negative feedback about this, transparency is important to me. I just wish other YouTubers felt the same…but I digress. Sometimes brands would come right out and offer me a certain payment in their offer, other brands would ask me to tell them how much I wanted to be paid for the video. That has always been difficult for me–I don’t want to sound greedy but I don’t want to get underpaid either. I recently learned about a great website called www.socialbluebook.com. It will ask you to input your channel size, social media numbers, etc, and then give you recommended values for sponsored videos, blog posts, and social media posts.
I also get a lot of questions from other bloggers and YouTubers about how I got to work with certain brands. I have personally never approached a brand to do a video, but I know that some do. In my case, they either just randomly found me and reached out to me, or they found me through an Influencer Marketing Company that has my contact information. I’ve worked with quite a few Influencer Marketing Companies (Grapevine, Reelio, Tapfluence, CrowdTap) and it all comes down to your gut feeling. It’s important that the companies I work with share a similar work ethic and moral compass with me, especially when it comes to transparency and honesty with my viewers. If I’m not feeling right, I back out. Just remember that this is a business and that contracts are involved, so read very carefully what you sign your name to before you decide to enter into an agreement. Most of these companies pay through PayPal, so if you haven’t already set up a PayPal account, I highly recommend doing so if this is something you’re interested in doing at some point.
Income Stream #3: Affiliate Links
For me, using affiliate links was a natural progression of my channel’s growth. Early on in my YouTube life, I started listing everything I mentioned in the video and everything I wore, because as a viewer that’s what I preferred when watching other people’s videos. I used to watch videos with a pen and notepad and write down everything they used or mentioned. It was a bit tedious and I had little scraps of paper all over my house! Then I would get subscribers asking me where they could find product XYZ, and more often then not, I would Google it for them and let them know. Almost 4 years ago, I was invited to join a company that generates links to all the products I use, to stores I already shop at, and if viewers click on those links AND actually use them to purchase something, then I get a small commission from those sales. It was a great fit for my YouTube channel because I was already listing the products in the description box, and now I could easily add links right next to the items so my viewers didn’t have to search for where to get them.
There are quite a few companies out there that you can apply to and become part of their affiliate program. I am with the company rewardStyle and I am also with Shop Style, although I rarely use their links. I have heard of another company called Magic Links but I don’t have any personal knowledge of them or their business practices so I don’t have anything to say about them. I’m sure there are others out there, but those are the ones I’m familiar with. You can also apply to be part of an affiliate program directly with a retailer. I know Amazon, Sigma Beauty, Coastal Scents, even iTunes, has affiliate programs. There are literally hundreds if not thousands of opportunities with different retailers and brands. Again, as with companies that broker sponsored videos, most of the affiliate marketing companies or programs pay out through PayPal on a monthly or bi-weekly basis, as long as your earnings have met the minimum $100 threshold.
So there you have it…the three main ways that I’m able to make an income making YouTube videos. I hope that this has been helpful to those who wanted to know more about the business side of YouTube, and I can’t wait to read your comments and questions. If there’s enough interest on a particular topic, I’m happy to make a follow-up video (and blog post) to address the questions. As always, I appreciate all of you more than you can possibly know, and I know that none of this would be possible without YOU!!
Thanks for sharing. I was raised to not ask about voting preferences, religion, or how much a person makes. Times have changed but that’s ingrained in me. It so interesting to me that this venue is now available as a source of income. You and I are the same age, and I am still amazed by the explosion of the Internet and all the possibilities it has brought. I view you as an entrepreneur. You’ve found your niche and I wish you continued success.
Thank you, Alicia!
Thanks for this blog…I have a 12 yr old daughter that want to make You Tube her career. I know she is only 12, but her father and I are trying to inform her that she has to have another career that she can not support herself on You Tube.
I really hope she listens to you and focuses on an education instead. The amount of people that actually make a real living off of this is very very small compared to the amount of people that make videos. But she can study photography, take business classes, and even learn how to blog as preparation to get into YouTube. But she should definitely have another plan for how to support herself!
Thanks for sharing Marnie! Although I would have never asked how much, I have been trying to figure out how for years. This is something I truly wanted to do, but could not figure out how to go anywhere with it. I have watched you since your very first video and love the way you have stayed exactly the same. Love your videos and love you!
Thank you for watching and sticking around for so long! If you’re interested in making YouTube videos, go for it!! There’s always room for more!
Haven’t heard about Reelio yet and right away signed up but my channel is of course to small (it’s 10k) lol! 😉
What bothers me with affiliate links is that you have the potential to make money off a product that you had nothing to do with. In your video you stated the cookies stay with your computer for anywhere from 7-30 days. So if I click on your affiaiate link to Nordstorm that was for a $30 lip gloss, I choose not to buy it, but 8 days later I go back to Nordstrom and purchase a $1000 handbag that you had nothing to do with, you make a commission off that? How is this fair? When you say you don’t understand why people have a problem with affiaiate links because it doesn’t cost them anything, don’t you see how this can bother people? Many people are none the wiser. I absolutely agree and think it’s awesome that you can make a commission, even if it’s a small one, off a lip gloss that you introduced to me or a cardigan that I never would have known about had it not been for you. Yes, in that case you totally deserve a compensation. But making a commission off something you had nothing to do with several days, if not a month, later? No, that’s not fair and that’s what I have a problem with. (And yes I know about and do clear out my cookies before making a purchase, but many people don’t know to do this. I’m simply stating my view on why I have a problem with affiliate links since you said that you don’t know why it bothers people.)
Hi Courtney-Let me explain again then why I don’t understand the outrage over the cookies. No matter when the commission is earned, whether it’s from that first click or a week later, it’s the retailer that pays the commission, not the buyer. The retailers have created this system, for whatever reason, and since they’re the ones that are paying out the commission fees and they don’t have a problem with it, then I still don’t understand why some people have issues with it. And just for the record, I have never suddenly received a commission off a $1000 purchase that was linked to a product that I had listed a week or more earlier. While in theory that “could” happen, it hasn’t for me.
Yes, I understand the retailer pays the commission, not myself. That part is very clear.
And you’re right, my issue should be and is with the affiliate program, not you. But please don’t talk to your viewers as if some of us can’t put two and two together and we shouldn’t have a problem with one of the ways you make money. When you say you don’t understand what the problem is, well then I’m going to tell you what the problem is. Whether it’s from a $1000 purchase or a $10 purchase, you are making money off purchases that have nothing to do with you. That’s what I think frustrates many people about this program.
I think what Courtney is saying, and I agree with her to a certain extent, is that if you introduce us to a specific item, then you should get compensated for the sale of that said item. However, you did not introduce us to the store (Loft, Nordstrom, Target, etc.), so you should not be compensated for items that we buy at the store other than the item that was linked from your channel/blog.
Personally, I think it’s fair to get a commission on the total sale of that single shopping session that was originated from you, because you directed traffic to the store. So if you linked a $30 lip gloss to Sephora, and I ended up buying that, as well as $500 of other products, I think you should be compensated for the entire $530 sale, because it can be argued that I wouldn’t have bought the items that day if it weren’t for you directing me to the store in the first place. Visitor traffic to a store site is highly important to retailers. What I do think it gets a little controversial, is if a week after I made my purchase (linked from your site), I go to the same store again, and spends $1000, it doesn’t seem fair for you to get a commission off of that sale, because, in Courtney’s words, this second sale has “nothing to do with you.” You didn’t do anything to “earn” that commission.
Listen, I totally see where you both are coming from. I’m not sure I understand the “unfairness” thing though-I didn’t create this system, the retailers did, and again, since they are the ones paying me and not my subscribers, if anyone should have a problem with this system, it’s them. I do also need to point out that while the scenario you suggested “could” happen, it has never happened to me. I’ve never received a commission like that just out of the blue. In any case, my goal was to continue to educate and inform my readers/viewers about what goes on behind the scenes, not to deceive anyone. I’m glad that you’re reading and commenting so we can continue to have a civilized discussion.
The unfairness part to me is the fact that about 99.9% of the Bloggers/Instagrammers/YouTubers out there fail to mention in detail this one little piece of the pie- if I click on an affiliate link, then days later go back to this website and make a purchase without clearing out my cookies, you are earning a commission off of this, regardless of what the purchased item is. Most everything I have ever read from someone who uses this program says something along the lines of “I might make a commission if you click on this link”, but this detail never seems to be mentioned. Of course, I can only speak for myself and I follow a lot of social media users.
I personally went MONTHS, if not a year+, before finding out about the cookies in your computer. I spend a lot of money online, and finding out that someone out there made money off something they had nothing to do with is very frustrating! This is what I think frustrates people, but you never mentioned that in your video. All anyone ever says is “I don’t know why people have a problem with affiliate links, you’re not paying any extra money for your purchase!”, when in fact that’s not the whole truth.
Nelda brings up a very valid point that you should make a commission off the entire sale if you drive traffic to that website. She’s right and I do agree with that!
Anyway, moving on! I think we all have our different views on this and I appreciate you responding with how you feel about it.
Hey Courtney-I’d say that the unfairness is in the fact that 99.9% of Bloggers/Instagrammers/YouTubers don’t even admit they’re using affiliate links, and the few that do give the vague “some of this links MAY be affiliate links”, but not one person that I’ve seen (at least on YouTube, which is my focus) indicates which links are actual affiliate links and then goes on to explain the cookies in their description box, which I do. So while I understand your frustration, mine lies in the fact that I seem to be operating in a vacuum as compared to my fellow creators on YouTube.
As with so many things in life these days, it’s buyer beware. I myself was completely unaware of how these affiliate links and cookies operate (complete techno-phobe here!!). If you don’t want Marnie to make a commission off a purchase you make, simply don’t click on her affiliate links and find the item independently.
I rarely shop online, however I would liken the commission Marnie might receive to the profit a department store makes from various brands. The department store makes it easy for me to shop by collecting a huge variety of brands for me to select from, I don’t have to get to 10 different stores. Every time they sell an item they are making $$ not because they made the garment/item but simply because they provided a service by sourcing it for me, just as Marnie is doing.
I don’t have a problem with the affiliate links at all, however Marnie I’m afraid I simply can’t use your links as the shipping to Australia is beyond ridiciulous!! I do thank you, though for introducing me to soooo many beautiful things. xx