A Guide to Passive Income for Designers

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Passive Income for Designers

There are a number of different ways to make money as a designer or developer. Of course, you could work as an employee for a design studio, you could work as an in-house designer for a company, you could freelance, or you could start your own studio or agency.

While those are the most common approaches, they’re not the only options. With loads of competition for client work, a growing number of designers are actually using a combination of a few different sources of income in order to earn a living.

You may have heard or read about earning passive income for designers. In this article, we’ll take a detailed look at the opportunities to use your design skills for passive or recurring income.

What Is Passive Income?

When it comes to the subject of passive income, there are lots of varying opinions and different definitions out there. For the purposes of this article, we’ll be looking at things aside from client work or work you would do as an employee.

With client projects, whether you’re charging an hourly rate or a flat fee for the project, you’re essentially exchanging time for money. The amount of money you can make will be limited by your rates and the amount of time you can work.

The approaches we’ll be looking at in this article are not passive in the sense that they require no work at all, but the amount of money you can make is not limited by the number of hours you’re able to work.

In most cases, you’ll be putting in the majority of the work up front, and then you’ll (hopefully) be able to continue to make money from that work well into the future. And you may be able to make money repeatedly for the same work, which is where the recurring aspect comes into play.

If you’re looking for an easy way to make money as a designer, this is not necessarily the answer. However, if you’re looking to use your skills in a smart way that may pay off over a period of time, read on.

Active Income vs. Passive Income

Active income is generated as a direct result of your work. When you stop working, you stop making money.

For designers and developers, the typical client project would be classified as active income. And of course, a job as an employee would be active as well.

While passive income will require work to set up, and it may also require some level of work to maintain, the money you make isn’t directly tied to the hours you work. And after you stop working, you may continue to make money as a result of what you’ve set in place.

If you’re currently generating all your income in active ways, it makes a lot of sense to look for opportunities to incorporate passive income. This may allow you to increase your overall income, plus it may also allow you to reduce your dependency on active income or even reduce the number of hours you work.

Why Recurring/Passive Income is Great for Designers

So if passive income for designers isn’t 100% passive, what’s the point?

Well, these options do require some work, but there are still plenty of benefits of these types of personal projects.

Reduce Your Dependency on Clients

Most of the freelance designers I know would love to be able to reduce their dependency on client work. Sure, client work can be extremely rewarding, but there are some significant benefits to not being 100% dependent on it.

One of the frustrating things about being a freelance designer is the need to constantly find new clients and new projects. You’ll need to dedicate time to communicating with potential clients and creating estimates or proposals. If you go through a spell where it’s difficult to find potential clients or to secure work, your income will suffer. If you have some supplemental income aside from client work, it can make these times more manageable.

Some graphic designers choose to pursue streams of passive income to provide extra stability for times when client work may be slow, and others choose to work towards getting away from client work altogether.

Ideal as a Supplement to Client Work

Although the potential to earn a living from passive or recurring income does exist, what’s more realistic for most designers is to simply use it to supplement their client work.

You may make half of your income working on client projects, and the other half could come from things like stock graphic sales and blogging. Earning a living strictly from client work is a real challenge for many freelancers because there’s so much competition out there, but earning a living from a combination of several different sources makes it a lot more achievable.

Diversifies Your Income

By establishing some alternate sources of income, you’ll add some diversity, which should provide more stability. That stability could become important if your client work slows down or if you need to take extended time away from work.

High Income Potential

Not every designer who pursues the types of projects we’ll cover in this article will make huge amounts of money, but some designers are able to earn much more with these approaches than they would be able to achieve with client work.

If you write an e-book that becomes a top seller or if you achieve a great deal of success with designing and selling stock graphics, you’re likely to make good money. It will probably equal a lot more money for the time you invested as compared to what you would make with client work.

Not every designer will make more money with passive income, but the potential is higher.

It’s Fun!

When you’re working on client projects, or working as an employed designer for that matter, you won’t usually have the privilege to work on things of your choice. You’ll be working on whatever the client or your employer chooses. It may or may not be something that interests you at all, but that’s your job.

One of the great things about these side projects for passive income is that you can choose what you work on, so you can focus on something you enjoy. Not only will that make your work more fun, but many designers also love knowing the sky’s the limit and what they get out of it is totally up to them.

Develop New Skills

These types of side projects are also a great way to develop new skills or to improve your existing skills. You can work on things you wouldn’t normally get the opportunity to work on otherwise, and if there’s a new skill you want to develop, it’s likely that you can find a way to incorporate it into your project. The skills you develop on side projects could come in handy for future client projects or in your own business.

You Can Work on These Projects in Your Down Time

Another major benefit to side projects is that you can typically fit them into your schedule when you have some downtime between client projects. For example, imagine that you have a client lined up for a new project, but they’ve been slow at making the upfront payment and signing the contract. Rather than wasting time while you’re waiting for them, you can use that time productively to design some new stock graphics to sell.

Or if you have a slow period between clients, you can use that time to work on designing templates to sell. Whenever the client work picks up again, you can put your side projects on hold until you have more time available.

Flexible Schedule

If you’re working toward getting away from client work altogether or at least relying on passive sources for the majority of your income, you’ll find your work schedule offers more flexibility. Instead of needing to be reachable during normal business hours, you’ll have the option to work evenings and/or weekends instead if you prefer. It’s also easier to travel and work on the go.

Passive Income Ideas for Designers

Let’s take a look at some of the specific ways designers and developers can earn money passively.

1. Design and Sell Templates

This is a really broad category because there are all kinds of different templates you could create, including:

  • Website templates
  • Business card templates
  • Brochure templates
  • PowerPoint or Google Slides templates
  • Social media image templates

Those are just a few suggestions, but the list could go on. Essentially, you’d be using your design skills to create templates that customers will use to get a professional-looking design quickly.

Templates are in high demand because they allow customers to get a great design at a fraction of the price of hiring a designer for a custom project.

2. Design and Sell Themes

While creating and selling website templates would be one option, the demand for static HTML templates isn’t as high as the demand for themes that can be used with a specific content management system (CMS).

There are several different platforms that you could create themes for, but WordPress and Shopify are currently the most popular. If you have some coding skills, you can design and code themes for these incredibly popular platforms. If you don’t do any coding, you could partner with a developer.

Shopify has a theme marketplace on their site, and if you’re able to get your themes included in the marketplace, you could start making some sales without needing to build your own audience.

If you’re creating WordPress themes, you could sell at a marketplace like Envato or create your own theme shop and sell from your own website. Popular theme shops like Elegant Themes and Thrive Themes started small, so there’s no telling what can happen.

3. Blogging

Blogging definitely requires a lot of work upfront. There is nothing passive about growing a blog from zero readers to something significant. However, it has the potential to become passive later on.

Once your blog reaches a certain level, the work becomes a lot easier. At this point your site is getting visitors every day regardless of whether you’re working or not. You’re probably still putting in the effort to keep the blog growing, but it’s very possible that your income will increase even as you reduce the number of hours you work.

Starting a blog is an ideal option for someone who wants to grow a business to a full-time income. It won’t happen instantly, but with some persistency and patience, it’s very realistic.

While there are many design blogs out there already, it’s definitely not too late to start your own. The audience is huge, so there’s plenty of room for more blogs.

Please see our step-by-step article How to Start a Blog that will walk you through the simple process of getting your blog launched today.

4. Niche Websites

A niche website is similar to a blog but with a very specific focus. Instead of covering web or graphic design in general, you could create a site that would focus on one specific aspect of design.

Most niche websites publish content that targets specific keywords in order to attract search traffic from Google. Often, these are low-competition keywords that may not get a high volume of search traffic. Achieving a spot on the first page of Google is much easier for low-competition keywords.

There are a few different ways to monetize a niche website but affiliate income and ads are the most popular.

Just like blogging, building a profitable niche website takes some time and patience. You might not make much money the first year, but if you stick with it, you might see huge growth after the site gains Google’s trust.

For more on the topic, see this guide to niche websites that I wrote.

5. Design and Sell Stock Graphics and Resources

There’s a huge demand for graphics and design resources, including:

  • Icons
  • Vectors
  • UI kits
  • PSD files
  • Illustrations
  • Patterns
  • Brushes

Other designers may be interested in purchasing your resources to use in their own designs and creations, or they may be purchased by businesses and end-users who don’t have the same design and creative skills as you.

These types of resources are perfect passive income for designers. You’ll put in the time up front to create the digital products, but then you can sell them over and over again. Many of these products will continue to generate revenue for years to come.

Getting started is also relatively easy because there are a number of sites where you can sell your creations.

You can also sell your products at deal sites like MightyDeals and InkyDeals.

6. Design and Sell Fonts

Every designer loves fonts. If you have the skills to create beautiful fonts, this can be a great way to make money.

Of course, some fonts are available for free download, but high-quality, professional fonts are able to generate a lot of revenue. You could sell your fonts at many of the websites and marketplaces listed in the previous section. In fact, in the video below you can see some tips from a designer who makes a six-figure income selling fonts at Creative Market.

7. Start Your Own Shop or Marketplace

Selling fonts, graphics, and other creative assets at marketplaces and third-party websites is a great option, but there are some downsides as well, including:

  • You don’t have full control.
  • The marketplace will take a cut of each sale.
  • Marketplaces can change their terms and policies any time (Creative Market reduced the commission for shop owners last year).
  • You may not be able to set your own prices, depending on the marketplace.
  • You won’t have the email addresses of your customers and you won’t be able to market to them directly in the future.

Another option is to sell on your own website. This approach takes more time and effort since you’ll be building your traffic and audience from scratch, but it eliminates all of those issues mentioned above.

Even if you choose to sell your digital products on other websites, it’s a good idea to sell on your own website as well (as long as it’s allowed by the marketplaces you’re using).

The technical details of setting up your own shop are easy. SendOwl is a very simple option that’s affordable even for small shops and a breeze to set up. You’ll be provided with “buy now” or “add to cart” links that you can add to your site or share through your social profiles.

Try SendOwl free for 30 and see how easy it is to set up your own shop.

If you’re going to be creating a large shop or marketplace with hundreds or even thousands of products, you’ll want to go with a full-featured e-commerce platform like Shopify or WooCommerce.

WP Engine offers the best hosting plan for WooCommerce, making it easy to set up a fast and secure e-commerce website.

8. Design T-Shirts

Print-on-demand services have opened up a lot of possibilities for passive income streams, including t-shirt sales. With platforms like Merch by Amazon, Printful, and Printify, you can sell your own t-shirt designs without the need to pay for inventory or handle the actual product. They handle the printing as orders are placed, and they also ship to the customer.

9. Sell Merchandise

Although t-shirts are a popular option, you can also sell other types of merchandise with print-on-demand services. Merch by Amazon, Printful, and Printify all allow you to sell a wide range of products featuring your designs.

Other marketplaces like Redbubble, Zazzle, and CafePress were created specifically to help graphic designers and artists to earn money through the sale of custom merchandise. All you need to do is upload your designs and you’ll earn a commission any time someone purchases an item using your design.

10. Create an Online Course

Use your design skills to create an online course that teaches aspiring designers. There are endless possibilities for courses you could create, and there are also several different platforms or ways to sell your course.

  • Skillshare is a course marketplace that allows you to create your own courses. This is a great place to start because many of the courses are brief (think of them as video tutorials) so it’s possible to get started without dedicating months of work.
  • Udemy is an extremely popular platform. You can create your own video courses and make money whenever someone purchases access to your course.
  • Sell courses on your own website with the help of Thrive Apprentice. By going this route, you’ll have full control and you won’t have to split the revenue with anyone else.

Creating a course will definitely require some time and effort. But once it’s created, it could be a source of passive for months and even years to come.

11. Become a Self-Published Author

Another way to use your design expertise to earn passive income is to write books or e-books. You don’t need to wait for a publish to offer you a book deal. Anyone can become an author these days.

Amazon’s Kindle Direct Publishing makes it easy to get your writing into print. You can sell your content in the form of an e-book or a paperback book, or both. You won’t need to pay to have hundreds or thousands of books printed before you sell them. Amazon will print paperback books on demand whenever they’re sold.

Another major benefit of selling on Amazon is access to their audience. Of course, millions of people shop on Amazon every day, so getting your book listed could be a great way to make some sales.

Although Amazon provides access to their own audience, you’ll need to do some of your own promotion as well. You can share links to your books or e-books through your social profiles or from your website/blog. If you have an email list, that’s a great option too.

You could also sell your books or e-books through your own website in order to retain full control and to avoid sharing the revenue with Amazon or someone else. Selling e-books with SendOwl is simple. If you have your own site and you’re interested in building a long-term business, selling the books on your own could be the best option with the highest ceiling.

12. Affiliate and Referral Programs

As a designer, there are a number of ways you could incorporate affiliate or referral programs into your work to make extra money with little effort. You could use these programs for the products and services you recommend to your clients, like:

You’re probably already recommending specific products and services to your clients, so this can be an easy way to make some extra money.

Aside from recommendations to your clients, you can also promote them in other ways like on your website or blog, through a YouTube channel, or via social media.

13. Reseller Web Hosting

Reseller web hosting can be a great opportunity for passive income for designers who create websites for clients. You can create your own web hosting packages that you’ll offer to clients, and you can even incorporate hosting into other packages or services you offer.

You’ll pay for a reseller hosting account with a major hosting provider and they’ll handle the technical details of the hosting. You won’t need to touch the server, it’s simply a private label hosting service that customers will see as one of your own services.

As a hosting reseller, you’ll be able to earn monthly recurring income from hosting.

14. Design and Sell Printables

Want to use your design skills to create simple downloadable products you can sell over and over again? Printables may be the answer.

A printable is a downloadable file, usually a PDF, that customers will be able to print at home and use for some specific purpose. Planners and organizers are very popular, but there are endless possibilities.

You could create printables for a wide range of target audiences, and it doesn’t need to be relevant to design or anything technical. You could use your skills to create printables for any audience you’d like. This is a great way to incorporate a hobby into your design business.

Just like the other types of digital products that have been mentioned in this article, you could sell printables on several different marketplaces, or sell directly through your own website. Printables are popular on Etsy, or you could use SendOwl or Shopify to sell on your own.

15. Create a Membership Website

If you’re serious about building a long-term online business, creating a membership website is another option. This could be great if you have a blog and you’re looking for a way to monetize it, or you could create a standalone site without the need for a blog.

Your membership website would charge a fee (usually monthly or yearly) in order to access premium content. The content could be design tutorials, downloadable resources, or anything else of interest to designers. Or you could branch out to a different niche and create a membership site that targets a completely different type of user.

Membership websites have outstanding income potential because the recurring fees keep coming in until your members cancel. It’s not easy to get started and takes a while to build up, but if you have a long-term focus and you’re willing to put in the work, it could be a great option.

Tips for Creating Passive Income

Know Your Purpose

There are a number of different reasons why you would start a side project. Maybe you’re just looking for a project that will allow you to do the things you enjoy, but with more creative freedom than your full-time work. Or it could be that you want to learn some new skills and you’re using the side project to gain experience.

For many designers, the motivation is at least partially motivated by the opportunity for income. You could be looking for a little extra money on top of your full-time income, or it could be that you’re a freelancer and you’re trying to make more productive use of your time between client projects.

It’s important to know your purpose and your motivation because it should dictate how you go about managing the side project. There is no right or wrong motivation. If your main purpose is to have fun and enjoy your creative freedom, you can pretty much work on whatever you want whenever you feel like it. On the other hand, if your purpose is to supplement your freelancing income, you’ll want to approach the side project with a more organized and business-like mindset.

Your purpose will also have a big influence on the specific side project you choose to follow.

  • If you’re looking to make money, you’ll obviously need to choose something with the potential for creating that income.
  • If you’re looking for something that will simply supplement your existing income, you may want to choose something that offers the potential to start making a small amount of money pretty quickly.
  • If your goal is to ultimately use the side-project to replace your full-time income, you’ll want to consider the long-term income potential of any projects that you evaluate.

Be Realistic About Time Limitations

One of the biggest challenges with side projects is the inevitable time limitation. Take a look at your schedule and try to be as realistic as possible about how much time you really can dedicate to a side project.

Do you have a few hours that you can dedicate each week?

Is your available time more sporadic and not as frequent?

It’s easy to get caught up in the excitement of an idea for a side project only to realize pretty quickly that you simply don’t have the time needed to make it work. It’s better to consider those time limitations before getting started and chose a side project that will fit with the amount of time that you have available.

Consider On-Going Requirements

Along with the previous point, on-going time requirements should also be considered. For example, you may have time available right now to create a WordPress theme or plugin to sell, but will you have the time for on-going support and updates that will be required? The more limitations that exist on your time, the more you should consider projects with a reduced need for on-going time commitments.

Anything that’s likely to involve a considerable amount of customer service or support will require that you always have some time available to deal with these issues. This doesn’t mean that you can’t sell any items or products, because some items require much less support than others.

For example, designing and selling an icon set will lead to a small amount of customer service emails, and most of the requests you do receive will be things like answering basic questions or helping people who may have issues with downloads or payments. Selling website templates, WordPress themes, or plugins will likely bring far more customer service requests, and many of them will involve more time and effort on your part to research and solve.

In general, things like stock graphics, printables, and e-books are good for designers who don’t expect to have much time available for ongoing support and service. And things like templates, plugins, blogs, community websites, an online courses are good opportunities if the need for on-going support is not a problem.

Also, keep in mind that income potential is not equal for all projects. So while top-selling WordPress themes will require support from the designer/developer, they also provide a high potential income.

Set Aside Time Each Week

Setting aside the time needed for your side project is important. If you’re working a full-time job or freelancing full-time you’ll probably need to set aside some time during evenings or weekends to focus on the side project. Most people, myself included, struggle to get things done on side projects if time is not designated specifically for that purpose.

Each project will have it’s own time requirements, so you’ll need to consider your own situation. If you’re working on something like a book that will take a lot of time to complete, try to find a time in your schedule that you can dedicate on a weekly basis.

Start Small and Build

From my own experience, one of the most challenging aspects of side projects is limiting the scope. In most situations it’s easy to try to do too much all at once, and with a limited amount of time available it can reduce the quality and success of the project.

If you’re working on a blog or a website as your side project, you may have big ideas and plans that you want to implement with the site. In most cases you’ll be better off if you can keep it basic to get started, focus on doing things well, and then expand and add new features or sections of the site later.

If your goal is to create a template or theme club as your side project, focus at first on just creating your first template or theme and doing the best job possible. Then later you can focus on adding more templates and themes, but don’t try to do too much right away.

Time limitations are something that you’ll always have to deal with on side projects. By recognizing the limitation and appropriately focusing on starting small, you can build success over a period of time, and you’ll do it on a solid foundation. If you’re trying to do too much all at once, it’s easy to get frustrated and give up before you achieve that success you’re looking for.

Consider Sustainability or an Exit Plan

While you’re thinking about how much time your side project will require on an on-going basis, think not only about the time that you’ll have available, but also about whether it’s something that you’ll still want to be working on a year from now.

Also, consider if it is possible for the time requirements of the project to grow faster than the income from the project. For example, you could start some type of community website for designers. It’s possible that the site could grow quickly and require more effort on your part to keep it running smoothly. It’s also possible that the site doesn’t produce significant income for you despite growth in traffic and the amount of time you spend working on the site.

If this happens, how will you sustain the site? Will you be able to use the income from the site to outsource the maintenance to someone else? Will you be able to quit your full-time job or scale back on client projects to allow for more time on the project?

In addition to sustainability, you can also consider if the project is something you may be able to sell. If the side project is a website or a blog, chances are you would be able to find a buyer when you are ready to move on to something else.

Obviously, the details of the project’s sustainability and your exit plan can change and evolve throughout the life of the project, but it helps to consider these details early on and at least start to develop a plan.

Conclusion

The unlimited possibility for side projects is one of the things I love about the design and development industry. There are always ways to have fun and experiment on your own, and making money with side projects is also possible.

However, in order for the project to truly be successful, you’ll need to make the best use of your time, and I hope the tips on passive income for designers covered in this article can help with your own projects.

Frequently Asked Questions

Is Passive Income a Myth?

Passive income is not a myth, but it’s often misunderstood. The concept does not mean that you will do no work at all or make money for doing nothing. Most streams of passive income require some upfront effort in order to set up, and then they run mostly on autopilot while you’re able to make money based on your initial work.

What's the Best Way for Designers to Start Earning Passive Income?

That depends on your unique skills and strengths. In general, simple digital products like icons, graphic design templates, PSD files, and printables are excellent choices. They’ll require very little time for customer service.

Should I Sell My Digital Products on My Own Site or on a Marketplace?

Selling on a marketplace is the quickest and easiest way to get started. However, you’ll have to share the revenue with the marketplace and you won’t have full control. If you’re looking to build a long-term business and you’re able to put in more time upfront, creating your own shop gives you the best potential. If you don’t have the time, simply sell on marketplaces.

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