How to make money on Instagram

Making money on Instagram requires clear planning and the right strategy. Brand collaborations, affiliate marketing, and selling your own products are particularly popular options. Getting paid on Instagram can be profitable from just several thousand followers, and it can generate an income of between a few hundred and several thousand dollars.

Instagram has grown from a small photo-sharing platform to a trillion-dollar business. With 500 million active users daily and over one billion users in total (as of March 2022), it’s no surprise that you can make money on Instagram. With Instagram Shopping, Meta (formerly Facebook) offers users the possibility of converting Instagram accounts into business accounts to go professional by selling via Instagram. But even without a business profile, if you’ve got more than 500 followers, you can get paid on Instagram.

No matter whether it’s five-figure sums through social selling and social commerce or just an e-commerce side income, at the beginning, there is always a well-thought-out strategy and a business model involved. Ways to generate income on Instagram are:

• Advertising: Cooperation with successful brands through product placement (e.g., as an influencer or model).
• On commission: Commission-based selling on Instagram through affiliate marketing
• Independent sales: You can easily sell your products online on Instagram. (e.g., photos, paintings, fashion, music, books, or decorative items).
• Drop-shipping: Selling products without any inventory, production, warehouse or distribution by dropshipping

Before we present successful Instagram strategies, it is important to understand what it takes to get started on Instagram.

If you want to make money on Instagram, you don’t have to have followers in the seven-figure range. That said, the more followers, the better. Depending on the niche, target group and brand, however, 500 to 1,000 active followers can be sufficient for decent royalties. Active and successful categories include fashion, nutrition, fitness, travel and beauty.

What’s especially important is that followers must not be fake. Reach can only be generated with an engaged community. The Instagram algorithm measures success by whether posts are fully viewed or clicked on, whether users read captions, whether posts receive many likes in a short time frame, and whether hashtags are used. Also have a look at our tips on how to get new Instagram followers to generate more reach and interaction.

The way in which the Instagram algorithm works is a trade secret of sorts. Despite that, it is possible to determine factors that the algorithm rewards with more visibility. These include:

• Content continuity
• High frequency of contributions
• Follower interaction/engagement
• Content relevance
• Lots of likes and comments in a short time
• Dwell time on posts

For accounts with few followers, it’s useful to know that the algorithm remembers the regularity of interactions, so you don’t have to have millions of followers to end up at the top of a feed. However, you do need to encourage followers to interact. To do this, you need high-quality content and call-to-actions that invite people to visit your store, to like, comment or follow you. To measure success, analysis tools can be used for Instagram statistics.

An important requirement for earning money on Instagram is registering a business. In the US, anyone who has so-called permanent profit-making and repeat intentions must register their business for tax purposes. So, if you intend to make a living from Instagram and e-commerce, a business registration is mandatory.

On Instagram, a lot happens at first glance. How many followers you attract and how much interaction you generate is determined by the quality of your content. This begins with the Instagram bio and Instagram profile picture. Product photos, Instagram stories and Instagram Reels should also offer the best possible resolution and video quality. So don’t skimp on technical equipment, use powerful image editing software and use Instagram tools for more reach. Also remember to change your Instagram name if it doesn’t fit the target group.

Since 2020, Instagram has offered a feature called Instagram shopping that allows you to sell products directly through an Instagram business account using shop links and product tags. If you want to earn money with Instagram Shopping, the following requirements must be met:

• Comply with Facebook policies
• Only sell your own products (not services)
• Sales/company location in Facebook-supported markets
• Proven reliability, transparency, and customer friendliness

A widely used strategy is sponsored posts and product placement. This Instagram strategy is suitable if you, as an influencer, have an active community, many followers, and a lot of reach. If this is the case, you can actively ask brands for cooperation in the form of sponsorship in order to give your products more attention. You will be financially rewarded in return. Depending on the brand and post, this can be in the range of several thousand dollars.

Contributions take the form of posts, carousel posts, stories or reels and use functions such as individualized or branded hashtags. Particularly well-known influencers are actively contacted by companies for influencer marketing or register on special influencer marketplaces.

Affiliate marketing is a direct sale of products from other sellers. To do this, you place traceable product links or promotion codes in your Instagram profile, in your Instagram bio and in Instagram posts through which a sale can be made. Links lead either directly to the vendor page, or to a corresponding landing page. Clicks generated by you and converted sales are attributed to you and rewarded with a sales commission that varies depending on the affiliate program.

If you want to get going yourself, you can market your own products, services, or art commercially on Instagram. As a platform with a focus on visual content, Instagram is ideal if you want to sell photos online or offer designs, drawings, posters, videos, and other visual products.

Of course, physical products such as fashion, beauty articles, jewelry, design/furnishing items, books or even food can also be sold using Instagram. Selling via Instagram Shopping with its own shop tab and product feed is particularly practical. A business account is required for this, however.

Drop-shipping sounds technical and abstract at first, but it is a simple way to sell goods without your own warehouse or production. You neither need your own inventory, nor do you have to worry about logistics. With your own drop-shipping store, you order goods from retailers and sell them to your customers. Storage, shipping, and delivery are not dealt with by you, but by a logistics company linked to your store or by the manufacturer. In other words, you act both as an online retailer and as an intermediary between end customers and wholesalers or manufacturers.

In order to be able to start with dropshipping, you usually need an online store for linking to Instagram, an account with suppliers or manufacturers and a registered business. You can find suppliers via supplier databases and wholesale marketplaces such as Wholesale2B, Sellvia, Modalyst and Dropified.

A question that many people ask themselves is what profits can be made on Instagram? That depends on how many followers you have, how engaged your community is, how well-known you are and which sales strategy you choose. If you sell your own products and services, you determine how much they cost. If that is the case, the profit is measured by how successful your marketing strategy is. The situation is different when it comes to sponsoring and affiliates.

Sponsored posts on profiles with up to 5,000 followers can bring in around 120 dollars per post. For affiliate marketing, prices depend on the conditions of the affiliate program. As a successful influencer with a large reach, you can negotiate lucrative contracts and collaborations with brands that can range from 1,000 to over 10,000 dollars per post or story. How much you earn depends on your negotiating skills, your market value, and your business model. The real currency on Instagram is, therefore, called engagement and reach.

To get a better idea of which business models are lucrative, we present three successful practical examples.

A frequent criticism of Instagram, a fixation on appearance, is also a recipe for success. No wonder, then, that fitness and beauty profiles regularly top the influencer charts. Successful influencers with a fitness or beauty channel can earn around 1,500 dollars for a 15-second sponsored story post to around 900,000 to 1 million followers. Instagram can also only serve as an extension here. In addition, creating a YouTube channel, a blog or using Instagram alternatives can be useful. Commercially successful fitness influencers include Kayla Itsines, Jen Selter and Izabel Goulart. In the international beauty sector, Kim Kardashian’s KKW Beauty is at the top.

Clearly, influencers and affiliates — as well as cooperating companies — in the fashion sector achieve significant market values too. With high-quality Instagram content consisting of fashion tips, product images or sponsored content in connection with product links, considerable amounts can be earned. The fashion label, Fashion Nova, with 125.2 million US dollars EMV is worth mentioning here. Through collaborations with celebrities such as Cardi B, and through social media integration, the label is one of the most popular worldwide and was considered the most successful Instagram profile in terms of influencer marketing in 2018.

Something you cannot simply plan or generate is prominence. However, prominence can be used as a marketing tool if you start a partnership with celebrity influencers for your own products and thus increase your market value, for example. As an extreme case – with around 400 million followers, Cristiano Ronaldo not only has the most successful Instagram profile, but also earns an estimated $1 million per post and thus represents enormous advertising and visibility potential for companies. Prominence is a value in and of itself, therefore.

There is no secret or blanket recipe for financial success on Instagram. In the following list, however, we will give you some tips and tricks that have been proven to work.

Those who don’t want to wait for brands to come to them can equally contact companies directly, or sign up on influencer marketplaces like Intellifluence, NoxInfluencer and Afluencer.

Anyone who uses online store software such as Shopify or WordPress with WooCommerce can integrate Instagram into their own e-commerce business. This is particularly useful for converting sales directly on Instagram.

Use Instagram ads to help get more attention for your products and reach new followers.

The length of time users spend looking at posts is a success criterion for the Instagram algorithm. So include content with added value as well as shop links and price information in your captions. The ideal length is between 138 and 150 characters.

Observe the guidelines on Instagram image sizes and video formats as well as on the length and number of hashtags (max. 30, ideally: 5 to 10). Do note that is a single post has more than 20 hashtags, a “shadow ban” could threaten to make your post invisible in the search. Also, take some inspiration from your competitors’ recipes for success.

Sponsored content and affiliate marketing doesn’t mean you have to sacrifice your own Instagram style. So make sure to integrate and label advertising and products naturally in your feed to inspire trust and interaction with authenticity.