How to create a Passive Income Stream as a Student

Erstellt von Lars Fromberg

Personal Introduction (Key Facts)

I’m a Master Student in Business and Technology looking for other sources of Income besides my part-time job as a working student. Time: My university and work time adds up to an average of 60 hours a week and therefore it is not possible for me to spend a significant amount of time for my “Passive” income. Financial Situation: I earn enough money to live but not enough to spend a meaningful amount in the creation of my Passive Income Stream. Therefore, my Creation should not be Capital Intensive in the beginning. Financial Knowledge: Passive Income Opportunities requiring high financial knowledge are definitely an option for me, because of my working experience (> 2 years) and education in the field of finance.

Decision

I choose Print-on-Demand Dropshipping as my Passive Income because it does not require a high amount of time or financial capital when starting the store (as described in the following). Also, my experience in the field of accounting is an advantage. Throughout this page, I will go through all the relevant steps which I had to take in order to create the Dropshipping Store.

Process Steps

https://miro.com/app/board/uXjVORZ8s94=/?invite_link_id=852181394382

Health Insurance

As a (working) student in Germany, you profit from a discounted insurance price. Depending on your insurance it is around 110€ to 140€ a month. You can only stay in this insurance “class” as long as you are a student who is not working more than 20h as an employee (40h possible in semester break) or you are not Full-Time Self-Employeed. There are no concrete numbers regarding Full-Time Self-Employeed and it is up to decide by the insurance company. The advisor of my insurance told me that I can stay with the student tariff as long as I don’t work significant hours beside my working student position (e.g. only a few hours in my semester break). Seeing the calculation below shows the significant difference between being in a student tariff or a Full-Time Self Employeed Tariff (student status as leverage). Additional Insurance Costs: 0€

Information are based on TK-Krankenversicherung: https://www.tk.de/service/app/2004108/beitragsrechner/selbststaendigeRechner.app

Filling out the form in Bavarian can be done here: https://formularserver.bayern.de/intelliform/forms/rzsued/rzsued/rzsued/gewan/gewerbemeldung-druck/index (filling out takes around 45min).

Trade Authority

Next up is the Registration with the Trade Authority. There are only two sensible options in my case: “Kleingewerbetreibener” or “Freiberufler”. Especially when starting, the differences are not that significant (generally “Freiberufler” has advantages regarding bookkeeping and tax), but as long as the dropshipping business is quite small it is not that important. Also “Freiberufler” has some specific requirements which are probably not fulfilled with my dropshipping store. ****With the Registration, you receive a UST-ID which is crucial for setting up the Shopify Store. The cost of Registration is 50 €.

Shopify

Most of the other Dropshipping factors can be done within Shopify when the most crucial topics are researched: health insurance & tax. I choose Shopify as my store because it is very mature with great plugins. My product should be related to my work field where I have experience and therefore I saved the domain boredaccountant.de (PW: accountant) ). The domain costs 1€ for the first year.

The first 14 days Shopify are free. Afterwards it costs 27 € a month.

Canvas: https://www.canva.com/

Store Logo

I created my logo on Canvas, where it is quite easy to create your own logo. You don’t even need a pro version. It is just important to note that I can not trademark my logo and it can be used by competitors. As I don’t expect to build a brand with my store, this is not crucial. Costs of Store Logo: 0€

Product & Supplier & Delivery

I choose my supplier to be Shirtigo as they have a very intuitive interface (safes time) and they are specialized in supplying Dropshipper. Most importantly: I don’t have to order in bulk or store something in my inventory. They will produce the product as soon as a customer orders something on my Shopify Store (Shopify Integration). The average delivery time is only 3 days. For my shop, I choose a cup. Delivery & Production per Cup is 11.1€.

The Logo was also created with canvas. The cup is sold in the shop for 25€ + Delivery Costs.

It-Recht Kanzlei München: https://www.it-recht-kanzlei.de/schutzpakete.html?pid=1

Legal Texts

There is the opportunity to just copy and paste the legal texts. But this obviously leaves a big risk. The safest way is to work together with a law firm. The offer from “It-Recht Kanzlei” München also includes legal aid in case you receive dunning letters (”Abmahnungen”). The costs amount to 10€ a month.

Marketing

After creating the store it is crucial to attracting customers. Accountants, which are my target customers, are not a broad target group( even though it is possible to run ads specifically for specific professions on Facebook). I created a Facebook Business Account and assumed the Marketing Costs per Product to be 7€. Similar to the Dropshipping video here: https://www.youtube.com/watch?v=jYx6NC46TaE

Marketing Costs vary a lot from product to product. Therefore it is hard to make assumptions beforehand (needs to be closely monitored/adjusted after going live)