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Generating passive income is all the rave online right now. What do you do if you don’t have a super awesome course idea lined up? My solution is to use physical products as a passive income stream.

Physical products make excellent passive income generators because you can use a print fulfillment company to handle all of the time-consuming parts like product printing, order fulfillment, and shipping. Most print fulfillment companies have a low to no start-up investment, no inventory (it’s print on demand) and they will drop ship your products.

What is drop shipping?

Drop shipping allows you to design or sell a range of products and then have them shipped directly to your customer from the manufacturer. Your customers won’t know that your products come from another company because the transactions happen on your site and then the order information is transmitted to your fulfillment company. It’s a pretty sweet set up.

Before we go further let me drop this disclaimer, passive income even with physical products still takes work. You’ll need to spend some time developing your products plus a few strategies to market and promote them. You’ll also need to handle any customer service issues that arise. Don’t worry I’ll offer a few suggestions later on to help you reduce that. But thanks to the magic that is drop shipping you won’t have to handle any products.

There are many different types of physical products available via fulfillment companies but I really love selling t-shirts. There’s something really awesome about seeing your designs out in the world. I created this guide to show you how to setup an online shop to start generating passive income by selling t-shirts. These same steps can be applied to designing and selling other products like cell phone cases, pillows, tote bags and leggings. There are tons of options for you to play around with.

Are you ready to create your inventory free online store?

Step 1- Create your virtual storefront

Your epic t-shirt designs will need a place to call home. There are tons of e-commerce solutions available so take some time to look through them and figure out which will best serve your needs.

A few things you’ll want to consider are:

  • Monthly costs
  • Transaction fees
  • Ease of use
  • Ease of customization
  • Other platforms it integrates well with (email service providers, accounting software, etc.)

My favorite e-commerce solution is Shopify (affiliate link). I’ve been using them for over 3 years and I absolutely love them. They integrate with almost every other platform available and there are numerous useful features. One of my favorites is the Buy Now Button. You can use them to create buttons and links to sell your products directly from your main website or blog.

Once you’ve decided on a platform you’ll need to do some customization to make it your own. Even if you’re not a design pro do the minimum and upload your logo and customize the colors to match your brand’s.

Step 2- Sign up for a print fulfillment company that sells t-shirts

Like e-commerce solutions, there are many options to different fulfillment companies to choose from. My personal recommendation is Printful (affiliate link). The Printful has a variety of t-shirt styles to choose from and they integrate seamlessly with almost every e-commerce platform. As a bonus, their print quality is great as well as their customer service if you run into issues.

If the Printful doesn’t work for you check out Print Aura (affiliate link) or Scalable Press.

Step 3- Connect your storefront to your fulfillment company

Now that you’ve chosen an e-commerce platform and print company it’s time to connect them. Follow the instructions provided by your print company to integrate it with your store. Don’t skip this step or else your orders will not be sent to print.

Afterward, you need to configure settings like shipping costs (check out the FAQs of your fulfillment company to see how they handle shipping charges), ship from address, customer service email, and invoices.

Step 4- Create your customer service pages

Even though you won’t be personally handling product fulfillment your customers don’t know that and will be looking to your site for help resolving problems. To reduce the amount of customer service issues that you’ll have to deal with I suggest creating a few pages to answer customer questions.

A few pages you’ll want to create:

  • Exchange and refund policies
  • Size charts
  • FAQs
  • Contact

I strongly suggest that you read through the policies that your print company has in place to handle issues and create your policies in alignment with theirs. This will help with setting customer expectations. For example, if your print company requires photographic evidence of an issue, make sure your policies advise customers that they’ll be expected to send a photo before their problem is resolved.

The more detailed and specific you get here the fewer problems you have to resolve later. Don’t skimp on this step!

Step 5- Create your initial t-shirt designs

Now we’re getting into the fun stuff. You’ve got some killer design ideas just waiting to be emblazoned across the front of a t-shirt. Well, the first thing you need to do before you start designing is read through your print company’s design guidelines to determine how to set up your files.

Also Read:   New Year. New Name. New Focus.

Many times they even offer templates that are already sized correctly, in the proper color profile and the necessary resolution. Do yourself a favor and use the templates if they’re offered.

Make sure you also read through the guidelines laid out by your print company for saving and uploading files. Pay close attention to file requirements for non-standard sizes (X-small and anything greater than an X-large).

If you’re a graphic designer I’m going to assume you have this one covered.

For everyone else here’s what I suggest: start experimenting with design software, create text based designs or hire out.

I do all of my t-shirt design work in Adobe Illustrator. You can try out other design programs like Canva or Snappa but I can’t vouch for the quality.

Step 6- Create mockups of your designs

This is one of my favorite steps. I love creating mockups of my t-shirt designs because I get excited seeing what the finished product will look like.

Your mockups also do the job of showing selling to potential customers. I suggest purchasing a high quality, photorealistic mockup to use in your store. They create clean and consistent t-shirt listings which will help you sell more (Remember customers only have the mockup photo to go by when making a purchasing decision).

The Printful has a free mockup generator. I prefer creating my own mockups in Adobe Photoshop.

My favorite and super-secret resource for high-quality mockups is the Mock Shop. Creative Market  (affiliate link) also has great mockups for decent prices.

Step 7- Upload your designs to your print company

Follow the instructions of your fulfillment company for uploading your designs and linking them to individual listings. This is where can set printing options for the range of sizes you plan to offer. Repeat this step for all of the options that you plan to sell.

Printful lets you upload a mockup with your design to help them with placement before they print. I strongly suggest that you include a mock-up especially if your design has a weird placement.

You can also decide if you want to make this design available in multiple colors. Generally, you’ll just be repeating this process with a different t-shirt color.

Step 8- Order samples

You’re about to cross another epic milestone friend. Are you feeling excited?

This step is critical. The success of your t-shirt line is dependent on your print company’s ability to deliver your newly designed goods quickly and efficiently. Once you receive your samples, pay attention to things like the print quality,  t-shirt quality, shipping times, packaging and overall design. If the print quality or colors seem off you’ll need to tweak your designs and order new samples. Sometimes the sampling process can take 2 or 3 rounds to get the design right.

Step 9-  Set prices and write product descriptions

Let’s talk a bit about pricing. One of the biggest benefits of using print fulfillment companies is that there are no upfront fees. You’re only charged when an order is submitted. So now you may be wondering how do they make money and what are the potential charges? Print fulfillment companies make money by charging a base fee per product plus shipping.

Here’s an example of the price of a t-shirt- $15 (t-shirt) + $5 (shipping)= $20

You make money by adding your own markup to their base price. So if you want to make $10 profit per t-shirt sale you would sell your t-shirts for $25 and charge $5 for shipping. The base price of t-shirts is determined by the brand and quality. You’ll want to test out pricing and brands to see what works best for your audience.

Now that you’ve decided on the price it’s time to write a brief description. I like to write a little about the inspiration behind the design or explain what the design means. This normally works out to be 2-3 sentences. You don’t really need more than that.

Here’s a list of other important things to include in your descriptions:

  • T-shirt material
  • Notes about the sizing
  • Cut and fit of the t-shirt (crew neck, fitted, cap sleeves, etc)

I like to set customer expectations about shipping by noting processing times in the listing. It’s also a good idea to link to a size chart or page with size information on it. This will greatly reduce the amount of sizing issue related emails you receive.

Step 10- Make your store live

Yay! Your awesome designs are about to be available to the world.

Before your store goes live do a final test of your checkout process and make sure it’s seamless. This is also a great time to schedule a few social shares announcing your newly open shop. I’d even go as far as sending an email to my list to let them know as well.

Do you want to see this in action? Check out my online store Keep Chasing The Stars which has a some of my favorite t-shirt designs.

Have you ever considered selling t-shirts as a passive income generator? Are there other physical goods that you’re interested in selling instead?

Contrary to what you’ve heard courses aren't the only way to generate passive income. And guess what?! You can generate passive income by selling t-shirts. Click through to learn how to launch a t-shirt line in 10 steps.