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Social Media Marketing: How to earn Money with Instagram

Oliver August 2020 10 min

Table of contents

Instagram is today one of the most popular social media platforms in the world. First published in October 2010, the app now has roughly one billion users. With such incredible numbers, it’s no wonder Instagram has become an important marketing tool for companies – one that many people see as a stepping stone towards a new career. 

Time and again, we see and hear stories about “influencers” who earn their keep purely by means of sponsored posts. But what, exactly, does a person have to do in order to boost their income with the help of Instagram? And how, exactly, can you turn the act of posting on Instagram into your main job and source of income?

We’ll show you what the options are, how to create and manage a great profile, and which legal aspects you should always keep in mind.

The Secret to Instagram’s Success

The fact that a person can make good money with Instagram is ultimately due to the sheer popularity of the platform. Indeed, the only place where products can be marketed successfully is a site that has a large number of active users. Instagram owes its tremendous popularity above all to the fact that it is very easy to use. New users of all ages can grasp the basic principles of the app very quickly. This includes not only the clarity of the feed, where users are supplied with a constant overview of the latest posts, but also the functions that make the use of other apps almost entirely unnecessary. For example, users can transform simple photos into impressive images and turn a profile into a unique photo album with just a few clicks. Instagram also offers all of its users the opportunity to connect with others and share their own lives with people all over the world. Private users can share impressions of their lives, while celebrities can quickly and easily give their fans updates. The platform is especially attractive for companies because it provides an enormously affordable marketing tool. It allows companies to generate attention for their products and services among potential customers with very little effort, while also providing them with additional product information.

How to make money using Instagram

Instagram offers you a number of different opportunities to earn money. In most cases, however, it only works if you already have a certain reach. There are no concrete numbers that determine success; in other words, it’s possible to earn money with 10,000 followers or even with just 1,000.

In fact, there are many companies out there that are now looking for smaller accounts where they can book advertising. We provide a summary here of the popular options available to make money on Instagram. 

>> Also of interest: How sustainable companies are profiting from current social trends

Instagram as an Advertising Channel 

Instagram offers various options to make money via advertising. First up is the option of engaging in what is called affiliate marketing. With this method, you promote a company‘s product by linking to it in a post. If users click on the link or, in the best case scenario, if they make a purchase, you collect a commission.

Whether you’re a fashion blogger helping users find a great pair of new boots or you’re a traveller recommending your favourite hotels to your followers – with affiliate marketing, there are no limits. If you’re interested in finding out how to write professional invoices to your partners, click here

The other possibility to earn money comes in the form of product placement. In this case, you don’t earn per click or per product sold; instead, you are paid by a company simply for showing or displaying their products. Of course, product placement makes the most sense when the product you’re marketing actually fits your profile and also when you know for sure that your post featuring the product will be perceived by users as being credible and authentic. 

Sell your own Products 

Yet another possibility is to use Instagram to market and sell products that you already offer elsewhere. This option is primarily aimed at companies that have a warehouse or similar facility in which they store goods that they already sell on other sites. 

In 2018, Instagram set up a function with which you can sell products directly via your posts and stories. However, this function can only be used by individuals who set up and use a business profile, which means that your goods must also comply with the dealer agreements and business guidelines of Facebook

In order to be able to sell something using the function designed explicitly for that purpose, all you have to do is upload your picture in a post or a story. There you can market the products and publish them with very little effort. Posts that have been marked with a product will then appear in the user’s feed with a shopping bag symbol in the corner. 

Earn money with your photos 

Instagram is perfect for photographers eager to share their work with the world. Of course, you won’t be the first person to come up with the idea, which is why the market has become extremely competitive. Still, if you have enough patience and a knack for drawing user attention, it is entirely possible to earn some additional money via the sale of photos.       

The most important thing is to make sure your photos are high-quality. The better your pictures, the more likely you are to convince users to buy them. 

In addition to traditional posters, you can also have your photos printed on mobile phone covers, pillow, greeting cards and many other physical products. The website is ideal for this, as it can be used to deliver products to Germany. 

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Mobile banking with practical iPhone and Android apps

How many Followers do I need to be able to make Money on Instagram? 

Now that you have all of the essential information, there’s one last question that needs to be addressed: When can I start earning money with Instagram? In fact, you don’t necessarily need as many followers as you might think. Ultimately, it’s not just the number of people who follow your profile that determines how much money you can make with the account, but rather a whole bunch of other factors, including the following: 

  • What kind of niche you operate in and how easily you can integrate products deriving from this niche into your posts 
  • How active your followers are; a large number of bought followers or ones that are inactive will bring you very little in the long run 
  • Exactly how you want to advertise and which companies you want to work with

These days, there are many brands that are eager to work with so-called micro-influencers. Even accounts with a limited reach have an opportunity to earn good money. The thing that’s much more important to companies is how active your followers are. Just because you have lots of followers doesn’t necessarily mean that they’re actually interested in your posts. 

Companies are looking for committed and enthusiastic users, because these users are also potential customers. This means that even if you have 3,000 to 10,000 followers, you can still already earn between €56 and €112 per post. 

How to use your Profile to attract and maintain Followers 

It only takes a few seconds for someone to form an opinion on a particular brand. This is why it’s extremely important to make a good first impression on Instagram. 

A good description should contain the following:  

  • Tell something about you and your brand 
  • Address your target group directly
  • A relevant link 

The last of these three options, in particular, is something you should definitely take advantage of. It allows you to guide your followers to your actual homepage or even point to certain products, for example, when you want to highlight special offers.

Last but not least, your profile picture also plays an important role. Especially in the case of an account that is used for business purposes, users should be able to recognise the brand already by looking at the profile picture. In most instances, this image is the brand logo itself.

When it comes to creating your profile, there’s no real right or wrong. The only thing that’s important is that potential customers are able to recognise your brand quickly and easily and are encouraged to stay on your profile and perhaps even visit your homepage.

Tips on getting started on Instagram

In order to achieve long-term success, the most important thing is to set small goals. If you set yourself clearly unrealistic and unreachable goals from the very beginning, you’ll probably lose steam and enthusiasm in the long run. Instead, you should create tasks that you can actually achieve and control, such as building a solid community and creating awareness for your brand. 

However, this can only work if you have the right strategy with regard to your posts. It’s especially important to get the most you can out of your post descriptions.

While some Instagramers use the space to share stories, others prefer to ask their users questions, which is a great way – and the ideal strategy – to increase the activities of these users.

When your goal is to remain present and active in the minds of users and followers, the most important thing is consistency; companies active on Instagram should never neglect this under any circumstances. A regular flow of posts ensures that you remain present in the minds of your followers, and it also lets them know when they can expect to see new content. Especially in such a fast-paced medium like the internet, you should plan in advance when and how often you intend to publish your posts. 

Will I have to register as a Business?

Anyone in Germany who pursues any kind of commercial activity is also legally obliged to register a business. Basically, this is necessary if and when you intend to make a long-term profit – regardless of whether you do so as a full-time or part-time activity. The precise size of your account also makes no difference.

However, if you engage in a one-off cooperation with a company, this doesn’t make you a business. But if you want to engage in cooperation with that company on a regular basis, then things look a bit different. 

In other words, to avoid any legal consequences, you should take care of things as soon as possible. The cool thing is that it’s relatively easy and uncomplicated to register a business in Germany. 

The registration of a business takes place at a so-called Gewerbeamt, a trade office where you apply for a Gewerbeschein, a trade license. You can usually find information on exactly which documents you need to bring with you on the trade office homepage. Usually you need to bring the completed application form, your ID card or passport and, depending on which state you live in, between €15 and €60 to cover the cost of the trade license.

Last but not least, you will have to designate the nature of your job. You could define your work as something like “Dienstleistungen im Internet” (services on the internet). This way, you wouldn’t be limited to advertising on Instagram, and you could also earn money on other platforms, if you choose to do so.

One thing you should always remember is that if you intend to earn money and make a profit, you will also be expected to pay taxes. The extent of the taxes you have to pay depends on how much you actually make. For example, if you qualify as a small business owner (Kleinunternehmer), you would be exempt from sales tax (Umsatzsteuer) and business tax (Gewerbesteuer).  

The requirement to pay a business tax (Gewerbesteuer) only kicks in when your business profit exceeds €24,500. It’s quite possible that you will still have to pay income tax as well; this will be the case if your profits exceed the statutory allowance of €8,652. 

The most important thing is to never lose sight of your income and outgoing expenses. Your Penta account will help you to always keep a clear overview of your finances. 

Instagram as a career opportunity

Just like in every job or profession, the rule of thumb on Instagram is that if you want to earn good money, you need to invest time and exercise patience. The best way to do that is to set yourself small goals that you check on a regular basis. If you notice that your strategy isn’t working, you can always make changes to your plan. The best approach is to not concentrate only on your posts, but also take a look at your profile and try to interact with users and followers. However, you should never forget that if you intend to earn money and maybe even make a profit online, there are also some legal rules and obligations that you should inform yourself of as early as possible. 

penta business account

The right business account for your Instagram Shop

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