For those interested in generating income online, understanding the workings of Instagram can be valuable. Instagram is a free platform for sharing photos and videos, allowing users to upload and distribute content to their followers.
With a substantial following and active engagement, it’s possible to earn anywhere from several hundred to thousands of dollars per month on Instagram. Naturally, achieving monetary success on Instagram requires dedication and commitment, whether it’s pursued as a side hustle for supplementary income or a full-time endeavor. To kickstart your journey, here are five methods to initiate income generation on Instagram.
Five Strategies for Earning Income on Instagram
Instagram isn’t the sole avenue for generating online income. If you’re exploring fresh business prospects, alternatives include:
Earning revenue on Twitch through brand partnerships, advertising earnings, subscriber contributions, merchandise transactions, donations, and Twitch Bits.
Generate income on YouTube via ad revenue, channel memberships, merchandise sales, and viewer patronage.
Monetize TikTok with brand collaborations, influencer affiliations, merchandise vending, and participation in the TikTok Rewards program.
Profit on Amazon by vending merchandise, publishing literature, or providing product assessments and endorsements.
Yet, if you determine that Instagram suits your goals, it’s crucial to comprehend the diverse methods to monetize your content.
1. Partner with Brands
Engaging in sponsored content stands out as a prime avenue for smaller influencers to earn income on Instagram. Influencers play a pivotal role in amplifying a brand’s products and services to a wider audience. Interestingly, brands aren’t exclusively seeking influencers with millions of followers. Those operating on tighter budgets may gravitate toward collaborating with smaller influencers who boast robust engagement rates and more affordable rates.
The terms of these agreements are often negotiable and may encompass a single post or a series of posts, stories, or reels showcasing the brand’s offerings. In return, influencers may receive complimentary products or services, gifts, exposure to the brand’s followers, or monetary compensation (or a combination thereof).
Influencers are commonly categorized based on the size of their audience.
Below are the five tiers, along with the usual earnings potential per post for each:
1. Nano: 1,000 to 10,000 followers ($10 to $100 per post)
2. Micro: 10,000 to 50,000 followers ($100 to $500 per post)
3. Mid-tier: 50,000 to 500,000 followers ($500 to $5,000 per post)
4. Macro: 500,000 to one million followers ($5,000 to $10,000 per post)
5. Mega: More than one million followers ($10,000 to $1 million+ per post)
The larger your following—and the higher your engagement (refer to “How Much Money Can You Make on Instagram,” below)—the higher the compensation brands will offer for sponsored content. If your following is substantial, brands might approach you with partnership proposals. Alternatively, you can enlist in Instagram’s creator marketplace or proactively approach brands that align with your niche and can be genuinely promoted by you. Another option is to leverage an influencer marketing platform to identify opportunities and engage with potential partners.
2. Participate in Affiliate Programs
Affiliates earn commissions on sales generated from product tags in posts, stories, and reels. Unlike brand collaborations where you’re compensated for creating brand awareness, in affiliate marketing, you earn money when your followers click on trackable links or use promo codes to purchase the products and services you endorse. In return, the brand pays you a small commission either as a percentage or a flat rate per sale.
Brands may directly approach you to explore your interest in joining their affiliate programs. Alternatively, you can proactively seek out merchants offering affiliate programs or explore online marketplaces for opportunities. While mega-influencers like Kylie Jenner have the potential to earn substantial amounts as affiliates, smaller influencers with dedicated followings can also benefit from these commission-based initiatives.
3. Activate Badges
Instagram badges offer an opportunity to earn income if you possess a business or creator account and have at least 10,000 followers. Badges allow your followers to express their appreciation and support for you during live videos, akin to leaving tips. Once you activate badges through your Instagram profile settings, they become available automatically during your live broadcasts. As viewers purchase badges, you’ll notice hearts next to their usernames.
These badges are available in increments of $0.99, $1.99, and $4.99 during your live videos. You can acknowledge your supporters with shout-outs during your livestream and afterward with “thank you” stickers in your stories.
Instagram indicates that creators receive the full revenue from badges purchased during live videos, with deductions made for applicable taxes, fees, and the 30% share retained by Google and Apple for in-app purchases.
4. Market Your Merchandise
If you have products or merchandise ready for sale, consider opening an Instagram shop to generate revenue. To begin, you’ll need a business or creator account. Once your shop is set up, shoppers can explore your catalog, view prices, learn about your products, and complete purchases directly on Instagram or by visiting your website.
To boost visibility for your shop, utilize various features such as tagging your products in reels, incorporating shopping stickers in your stories, and collaborating with other creators who can tag your products to reach new audiences.
5. Monetize Reels with Ads
Following the discontinuation of Instagram’s Reels Play bonus program earlier this year, Meta, the parent company, has unveiled the expansion of “Ads on Reels,” a performance-driven monetization initiative accessible on both Instagram and Facebook. According to the announcement, “With a performance-based model, creators can prioritize content that resonates with their audience and aids in their growth; advertisers gain access to more ad inventory to reach a wider audience; and viewers receive a more cohesive viewing experience with more pertinent ads.”
Earnings are determined by the number of views your reels garner (not by the ad revenue generated), meaning the more successful your reels are, the higher your earnings. Meta is currently testing the program, and it’s not universally available. To participate, you’ll require an invitation from Meta to join the testing phase.
Your potential earnings on Instagram hinge on four pivotal factors:
1. Follower count : The number of followers you have directly correlates with your earning potential. Nonetheless, brands also prioritize a solid engagement rate. As per marketing tech firm HypeAuditor, influencers with 1,000 to 10,000 followers typically earn an average of $1,420 per month, while those exceeding one million followers can rake in approximately $15,356.
2. Engagement rate: Engagement reflects how users interact with your content through likes, comments, shares, and saves. Having a small yet engaged audience can yield higher earnings compared to having a large audience with minimal interaction. A common method to calculate engagement is by dividing the total engagements per post by the post’s reach (the number of viewers) and then multiplying the result by 100. According to social media management company Hootsuite, a desirable engagement rate falls between 1% and 5%.
3. Your niche: Sellfy suggests that the 11 most lucrative niches on Instagram in 2023 are, in descending order, travel, beauty, fashion, health and fitness, lifestyle, parenting, business, music, photography, food, and animals. Focusing on one of these niches can facilitate the growth of a larger audience and increase opportunities for sponsored posts.
4. Your reputation: While a substantial Instagram following can enhance your earning potential, numerous brands collaborate with renowned athletes, scientists, and other subject matter experts to leverage their offline reputations, irrespective of their online follower counts.
