Side Hustles Won’t Make You Money
Okay, side hustles might make you some money. But, they won't be worth it. Or, you will be disillusioned by the results.
I will explain what I mean by all of this. But, first, let's discuss what side hustles are.
Side Hustles Explained
If you aren't familiar with the term, a side hustle is a concept or technique you can use to make money without quitting your job (or current form of income generation). It is more than just a part-time job. It's something you can do online whenever you need to make some extra money.
It is likely to mean different things to different people. Wikipedia defines it as more of a part-time job or contract work. However, you can find plenty of side-hustles where no traditional employer-employee relationship exists. Investing in dividends could be considered a side hustle, for instance.
Why You Probably Won't Make Money
The reasons fall into several categories. They are as follows:
- 1Too Much Effort for Too Little Gain
- 2Requires Full-Time Commitment
- 3Attracts Scammers
- 4Competition is Fierce!
- 5Cash Back is Not Making Money
- 6Trial Periods (Cancel Before Getting Charged)
- 7Finding Work Requires Too Much Time
Too Much Effort for Too Little Gain
In this type of side hustle, you are required to put in much of your time with minuscule rewards. An example is micro tasks from companies such as MTurk (Amazon), TaskRabbit and others like it. You perform tasks that pay you pennies to complete. Some of the tasks require several minutes or more of work.
As an example, you may choose a task that has you read through a passage and then answer questions based on what you read. You spend twenty minutes reading through the passage and then you answer questions based on what you read. You may think you can get away with not reading the passage and selecting any answer just to get paid. But, they have safeguards against this. If you tried this not only won't you get paid but you'll get banned.
Another example of tasks that require much of your time is viewing ads for points. Those points amount to pennies on the dollar and takes hundreds, if not thousands of points to return a few dollars. You will have spend hours browing through ads to make those few dollars. You may have seen companies such as SwagBucks.com who use this model.
Important: Many companies that are listed here and elsewhere are legitimate companies. It's just that you aren't going to make what you think you will when using them.
Requires Full-Time Commitment
I've got nothing against opportunities that require a full-time commitment. The trouble is they aren't side hustles. I'll give a few examples.
Blogging - you can set up a blog and put in a part-time effort. You may even make some money doing so. However, most bloggers will tell you it takes much more than a small effort to make these successful. You have to constantly create quality posts in order for them to produce for you. This will require time, money, or both. As competition increases, you can expect the time to payout to be much greater than it used to be (if ever).
Overworked Businessman
Affiliate Sales - this is a great means to earn but it too has become quite competitive. The concept behind this is you send traffic to a vendor's website and the link or banner is encoded with your information. When a customer makes a sale on the vendor's website, you get a cut or a commission of the sale. It's a great concept but requires know how to make it work (more below!)
Dropshipping - on paper, this seems like a great business model. You contact a vendor who agrees to ship a product on your behalf. You advertise the product somewhere (your blog, ecommerce site, etc.) and when a customer purchases, you order it and ship it directly to the customer.
In a regular retail situation, you would purchase cases of a product and have it shipped to your house or warehouse. When you make a sale, you would ship each product. Dropshipping alleviates the need to hold any inventory. You just take care of the transactions. Many vendors will ship the products with your logo to make it look as though you are the product creator.
While this model does seem to have merits, it's not without flaws. First, getting products that have attractive margins is challenging at best. Once competitors discover a high margin seller, they will jump in and flood the market.
Second, you have to deal with returns. You have to make arrangements with your vendor on who will pay the shipping on the returns. Even if your customer or vendor agrees to pay, you won't make back the marketing and selling expenses it took to get the person to your website and purchase the products.
Third, vendors don't love dropshipping arrangements. It is a hassle for them to deal with one-off purchases. Most vendors will tack on a dropship fee because of this. That fee can knock out any margins.
Fourth, it's difficult to bundle products from different vendors. You may set up relationships with vendors who have complimentary products. However, you would still have to charge your customer separate shipping on each of those products unless you can somehow work out an arrangement with the multiple vendors.
Can dropshipping work? Some people do make dropshipping work for them. Someone who does large volumes of sales can likely makes some money. Others use dropshipping as a loss leader where they break even or take a loss in order to get customers on their mailing list. Then, they sell higher-margin products to the list.
There are plenty of other opportunities that require full-time efforts in order to make them work. These are some common ones. Again, calling them side hustles is a stretch.
Easy to Get Scammed
When looking for a side hustle, you'll find offers that entice you. You pay to get more information about how to make money with the technique only to discover it is pure nonsense and won't work. Welcome to the world of getting scammed!
While selling information about how to make money is not necessarily a scam, selling information about how to make money where the information seller knows it won't work is a scam. Worse, the information these scammers provide you may get you in trouble if you follow the advice. Remember, scammers don't care if a search engine bans you or you find yourself in legal hot water. They take the money and run!
Competition is Fierce!
If you get nothing else from this article, at least understand that most opportunities are wickedly competitive. For instance, you may read that you can make money selling services on Fiverr. You can. However, you will be up against thousands of others trying to do the same.
If you get nothing else from this article, at least understand that most opportunities are wickedly competitive. For instance, you may read that you can make money selling services on Fiverr. You can. However, you will be up against thousands of others trying to do the same.
Anything that has low barriers to entry and that have a potential of earning are going to attract competition en masse. This is Economics 101. Sellers continue to lower their prices until no one is making money. It's a race to the bottom.
Cash Back is Not Making Money
You will find plenty of "opportunities" that state you can make money on your purchases. Or, you can earn points from your purchases that can be used to receive cash back. The trouble is, you haven't made any money when doing this. All you did was receive a discount. However, you read plenty of gurus telling you this is a way to make money. It's not. If you spend $100 on a purchase and you receive $15 back, you received a discount of $15 on your purchase. Nothing more! You did not earn $15.
Luckily, at the time of this writing, the IRS agrees with this notion. This means you won't have to pay taxes on that $15 rebate. Keep in mind, however, if you receive a cash incentive for opening an account, that is considered earnings in the eyes of the IRS. When you open a bank account and the bank deposits $200 as a thank you for banking with them, that is taxable income! You've been warned!
Points or Cash for Subscriptions
Another class of making money is earning points when you sign up for services. InboxDollars.com and others like it, use this model. When you sign up for a service like this, you receive offers to subscribe to various vendors. If you do, you are given a certain amount of cash as an incentive to sign up. Advertisers use these services to get people onto their paid subscriptions.
The catch? You usually have to pay for a full month (or more) of the subscription in order to keep the cash reward or points. You can bet that the amount you get back is much lower than the subscription costs.
Another snag is that most of these vendors make it quite difficult to cancel. They make you call them and they hard sell you to stay. If you can get through to them at all, they will wear you down until you agree to stay another month.
I think a law should be passed that requires vendors who sign up customers online have to offer a cancellation option online.
Customers are learning not to fall for these schemes, but vendors continue to rely on newcomers. Make sure you read the terms of all offers before agreeing and signing up! Also, if the subscription costs more than the cash your receive as an incentive, you haven't made any money. It has cost you money!
Finding Work Requires Too Much Time
Anyone who has ever worked from home will tell you one of the biggest hurdles is finding work. It takes much of your time. Remember, when you are looking for work you aren't getting paid for the actual services you provide. You may find some odd jobs, but when they are complete, you are back to square one in searching for your next gig.
Some people luck out and find clients willing to pay for ongoing work. Such clients do exist. However, finding them is even harder than looking for those odd jobs. Plus, they don't last forever. A steady client can end that relationship on a whim.
An alternate approach is to hire outsourcers to find the work for you. There is nothing wrong with this. However, the whole concept of finding side hustles is to make some cash, preferably quickly. Paying for outsourcers eats into the cash you earn.
I could argue that a full-time freelancer should consider this approach to free him or her up to complete assignments. Still, someone starting out full-time may not have the financial resources to do this. Plus, you need to find someone good who will actually get you jobs.
Does This Mean You Can't Make Money Online?
The purpose of this post is not to discourage you in looking for ways to make money online. In fact, I am still a firm believer that you can (I do). It's more about setting your expectations. You are going to see many articles and listicles of all kinds of side hustles that will suck you in and make you believe you'll be a millionaire in a week or so. However, what usually happens is major disappointment and a lot of wasted time and money.
If you are interested in finding an opportunity that can work (but is not a side hustle), learn about how I use affiliate marketing to make money. It's one of the best business models to get started with earning online. You don't need any shopping carts or products of your own to sell. When you learn the techniques I learned, you will see how it is one of the few opportunities that are not as competitive as everyone believes (when you do it right!)
