What is a physical product business?
With this kind of business you would produce physical goods – or get them produced to spec – then sell them via an online store or marketplace.
Of course, most physical product businesses are not 100% online, but the ideas and examples on this page all have a significant online component.
Physical Products are one of 19 types of online business and considered a Level 5 online business, according to our framework.
6 Levels and 19 Types of Online Business
Level 1 = Novice
Okay for side income or beer money, but hard to earn a living.
Level 2 = Intermediate
Best for earning a living online when you’re starting out, but hard to scale.
Level 3 = Advanced
Easier to scale and higher income potential, but you usually need significant investment of time and/or money upfront.
Level 4 = Superior
Even more scalable and even higher income potential, but also more complex / difficult / expensive.
Level 5 = Distinguished
Most complex / difficult / expensive, but the rewards here can be massive.
Level X = Wildcard
These are the misfits. Many aren’t even considered businesses in the traditional sense, but they are all ways to make money online. You typically need a lot of time, money, or luck to succeed with anything here.
How can you make money online with physical products?
Here are the legit ways I’ve found to make money online with physical products…
Start a Print On Demand Business
This is something of a hybrid of physical and digital products. You would create the design or artwork that would be printed onto physical goods – t-shirts, mugs, whatever – before being shipped to the customer.
A third-party service like Printful or Merch by Amazon would handle the printing, packing and shipping.
Sarah Chrisp has achieved impressive success with this kind of business…
- Founder of Wholesale Ted
- $60,000 monthly revenue from print on demand store
Create and Sell a Private Label Product
To create a private label product you would find a manufacturer who already produces something similar, and have them produce a slight variation for you.
Add some good branding and marketing to the mix, and you’re off to the races.
For example, Michael Schneider’s private label product is a phone wallet that sells well on Amazon…
- Co-founder of Gecko Travel Tech
- $88,000 monthly e-commerce revenue
Sell Your Arts and Crafts Online
Gladys Estolas turns stock market charts into art and sells the prints online…
- Founder of Stoxart
- $45 – $180 per print
Courtney Bleier and her sister teamed up to create and sell handmade jewelry via Etsy…
- Co-founder at Ann + Joy
- $4,000 monthly e-commerce revenue
Mass Produce Your Own Physical Product
At only 16 years of age, Kartik Gurmule got some luxury shoes designed in the UK, found a manufacturer in Italy, then started selling the shoes online and shipping worldwide…
- Founder of KASA, Co-founder of Dropshyp
- $80,000 monthly KASA revenue
Create and Sell Customized Physical Products
90% of Dane Jensen’s e-commerce sock business comes from designs submitted by customers…
- Founder of Sock Club
- $1 million sock club monthly revenue
Crowdfund Your Physical Product
Charles Harris is a pro at this, having run multiple successful crowdfunding campaigns, including one for a tangle-free charging cable that raised almost $4 million…
- Founder of SuperCalla Technology
- $3.7+ million crowdfunded for one product
License an Idea for a Physical Product
Licensing an idea effectively makes you a silent partner in a business; you come up with the concept and the licensee does everything else.
Back in 2005, Nate Dallas was able to sell an idea for a board game to Mattel and earn $300,000 in passive income over the next ten years…
- Serial Entrepreneur
- $2,500 monthly royalties for one product idea
⚠️ Nate admits that the Mattel deal was exceptional; his subsequent licensing deals weren’t nearly as lucrative.
Pros and Cons of Physical Product Businesses
- Can have a higher perceived value compared to digital products.
- Less copycat and piracy issues compared to digital products.
- You create a real physical thing that you can hold in your hands and show your grandma so she can kinda understand you’re not just selling drugs on the internet.
- Usually requires a complex set of skills.
- Costs and headaches associated with manufacture, storage, shipping, customer service, etc. (Though this can be alleviated in some cases with the right setup, like Merch by Amazon.)
- Can be hard to scale compared to digital products.
- Lots of fake gurus and scams promising quick and easy success.
Is a physical product business a good way to earn a living online?
Bringing a new product successfully to market is tough.
A physical product business generally has far more complexity than a digital product business, since you’re moving atoms around, not just data. And you still have to figure out sales and marketing.
All that to say: it usually takes a significant investment of time and/or money to achieve success with a physical product business.