Instagram Monetization: 6 Ways to Earn Money on Instagram

If you’ve ever thought about monetizing your Instagram account, you’ll be pleased to know that it’s easier than ever in 2020.

Instagram’s continued investment in e-commerce features has opened up a world of opportunities for brands — as well as the creators who help support them.

We’re rounding up the best new features to earn money on Instagram, from Instagram Live Shopping to IGTV Ads:

Instagram Monetization: 6 Ways to Earn Money on Instagram

How to Make Money on Instagram:

This year, Instagram has been making some serious progress in the e-commerce space. From the ability to set up virtual storefronts, to having fans “tip” their favorite influencers, there’s a whole host of ways to make money on Instagram.

Here’s 6 new features that can help you monetize your Instagram account: 

Instagram Monetization #1: Sell Products With Instagram Shopping

Instagram’s first iteration of Instagram Shopping launched all the way back in 2016 as a simple product “tagging” feature. You could tag products in your posts and link them to your website where users could make a purchase.

Although the premise behind Instagram Shopping hasn’t changed much since 2016, the scope definitely has.

Today, Instagram Shopping is comprised of several features bundled into a single package: you can tag products in your organic posts and Instagram Stories, have people discover your products in Search & Explore, use insights to learn which products your community has engaged with the most, and (eventually) allow users to checkout directly from the Instagram app.

Here’s a breakdown of these features:

#1. Instagram Shopping Posts

Once you get set up with Instagram Shopping, you can start adding Shopping Tags to highlight products in your Instagram posts (including photo, video, and carousel posts).

To tag products within an Instagram post, start by uploading a photo as you normally would, and then tap “Tag Products” to tag a product from your Facebook catalog.

You can feature up to five products per image or video post, and up 20 products on multi-image (carousel) posts. You can also go back and add shopping tags to old posts on your business profile.

instagram shopping

When someone taps a Shopping Tag on your post, they’ll be taken to a product description page where they will see: an image of the product from your post, a description of the product, how much the product costs, and a link that takes them directly to your website where they can purchase the product.

instagram shopping

Instagram is also planning to launch AR experiences within product description pages, allowing users to virtually try products before making a purchase.

#2. Instagram Shopping Stories

Like with shopping posts, once you get set up with Instagram Shopping, you can start tagging products in your stories using the Shopping Sticker.

instagram shopping

Stories can feature one product sticker per story and you can adjust the color and text of product stickers.

#3. Instagram Shop

In a recent Facebook Live announcement, Mark Zuckerberg shared several new e-commerce features to support companies looking to bring their business online during COVID-19.

One of the biggest announcements was Instagram Shop, an upcoming feature that will provide a new way to discover and buy products directly within the Instagram app.

According to the announcement, Instagram Shop will begin rolling out this summer in the US, with plans to add a brand new shop tab in the navigation bar later this year, so you can get to Instagram Shop in just one tap.

You can get inspired by collections from @shop, browse selections from your favorite brands and creators, filter by categories like beauty and home, and so much more!

But until then, you can still find and shop products on the Search & Explore page as you normally would!

instagram shopping

#4. Instagram Checkout

Released to just a handful of mega-brands in the US last year, Instagram Checkout is a highly sought after feature that allows users to make a purchase without ever leaving the Instagram app.

With Instagram Checkout, customers can tap to view a product from a shopping post and then continue to the payment process, all within Instagram. All they have to do is enter their name, email, billing information, and shipping address the first time they check out.

It’s simple, streamlined, and probably the easiest way of converting Instagram followers into customers.

However, despite such obvious advantages, Instagram Checkout might not be for everyone.

For some, Instagram’s transaction fees may be a cause for concern. According to their Business Help Center, the selling fee is 5% per shipment or a flat fee of $0.40 for shipments of $8.00 or less.

And Instagram Checkout can also mean brands lose out on valuable customer data (such as emails) as all communications are handled by Instagram rather than the brand directly.

instagram monetization: make money on instagram

That being said, we expect a ton of brands to use Instagram Checkout once it rolls out more widely!

Instagram Monetization #2: Create a New Revenue Stream With Shopping From Creators

Instagram’s Shopping from Creators may still be in beta testing, but it’s already causing a stir when it comes to driving sales on social!

The feature allows creators and influencers to create their own Instagram shopping posts and tag products from the brands they partner with.

instagram monetization: make money on instagram

Of course, not just anyone can start tagging products from brands and reap the rewards. In order to access the feature, you first need to switch to an Instagram Creator Account, and then you need to be approved by a brand to tag their products in your posts.

Once you’ve done that, you can start tagging products in your feed posts and Instagram Stories!

Just keep in mind that Checkout doesn’t have a revenue-sharing model at the moment, so you’ll have to work out any affiliate or conversion payments as part of your influencer agreement.

On the brand side, Shopping from Creators is packed with benefits.

Not only does it make creator partner posts so much easier to shop, but it also allows you to track exactly how many product views and clicks the tagged post is attracting. This is a super useful insight into what drives engagement and (most importantly) what drives sales.

This feature is also in a closed beta, but we’re hoping it opens up this year!

Instagram Monetization #3: Build an Integrated Online Store With Facebook Shops

Facebook recently launched its biggest move into e-commerce yet: Facebook Shops!

According to Zuckerberg, the basic idea behind Facebook Shops (or Shops for short) is that it allows small businesses to build an online store and sell things directly across Facebook’s family of apps, including Facebook and Instagram.

Business owners can create a dedicated “shop” section on their Facebook Page or Instagram profile and build out a catalog of products and services that visitors can browse, save, share, and even purchase.

instagram shopping

And while every business, both big and small, can benefit from this, Facebook Shops is especially valuable to small businesses.

That’s because Shops are free and easy to create, fast, and, most importantly, they’re integrated across Facebook’s many apps, meaning once you set up your shop, it’s going to be available on your Facebook Page and your Instagram profile (and accessible from stories and ads).

instagram monetization: make money on instagram

Facebook Shops are also highly customizable. Businesses can choose the products they want to feature from their catalog and then customize the look and feel of their shop with a cover image and accent colors that showcase their brand.

Facebook is partnering with Shopify, BigCommerce, Woo, Channel Advisor, CedCommerce, Cafe24, Tienda Nube, and Feedonomics to help brands bring their products into Facebook Shops.

Businesses will be able to use these third-party platforms to manage their Facebook Shops, as well as any social ads related to those Shops.

Speaking on the partnership, Shopify said: “Facebook Shops allows Shopify merchants to get control over customization and merchandising for their storefronts inside Facebook and Instagram, while managing their products, inventory, orders, and fulfillment directly from within Shopify.”

According to Zuckerberg, part of Facebook Shops’ customization will also come from AI and Facebook’s augmented reality tech.

For example, if you’re a clothing store that makes clothes for both men and women, you’ll be able to personalize your storefront to show products that are most relevant to the visitor, like men’s jackets or women’s jeans.

Visitors to your store will also be able to use AR to virtually try on things like sunglasses, makeup, and even furniture — a lot like Instagram’s augmented reality shopping feature that was announced late last year.

instagram monetization: make money on instagram

And just like when you’re in a physical store and need to ask someone for help, in Facebook Shops you’ll be able to message a business through WhatsApp, Messenger, or Instagram Direct to ask questions, get support, track deliveries, and more.

And in the future, you’ll be able to view a business’ shop and make purchases right within a chat in WhatsApp, Messenger, or Instagram Direct.

Instagram Monetization #4: Make Money on Instagram With IGTV Ads

Last month, Instagram broke the news that it’s finally rolling out updates that will allow creators to earn money directly on IGTV!

These updates include new ads on IGTV videos, badges that viewers can purchase during a live video, and an expansion of Brand Collabs Manager, which is essentially Facebook’s own influencer marketing platform.

instagram monetization: make money on instagram

The launch of video ads is big news for the platform — this is the first time creators will be able to make money directly from IGTV since its launch in 2018.

Along with the earlier release of Instagram’s Shopping from Creators for feed posts and stories, the addition of IGTV ads gives creators access to a full-fledged money-making platform.

And while details are still scarce, according to an interview with The Verge, Instagram’s COO, Justin Osofsky, shared that those in the program will receive an “industry standard” 55% share of all advertising on IGTV.

As mentioned in the announcement, Instagram plans to test IGTV ads with a small group of creators and advertisers in the US and will expand slowly over time as they improve the experience (this includes IKEA, Puma, Sephora, and more).

They also plan to test various experiences within IGTV ads throughout the year — such as the ability to skip an ad.

Popular creators such as Avani Gregg and Salice Rose will be among the first to test out the new monetization feature, with a wider, international release in the coming months.

Instagram Monetization #5: Earn “Tips” With Instagram Live Badges

Playing off a popular feature within Twitch and TikTok, which allows followers to “tip” creators during live streams, Instagram Live Badges are the latest feature aimed at helping influencers make money on Instagram.

With the new feature, viewers, followers, and fans can purchase a badge during a Live video that will stand out in the comments and unlock additional features, including placement on a creator’s list of badge holders and access to a special heart.

instagram live badges

Although badges are still in beta, according to early details, badges will be available on 3 different tiers, based on the number of hearts available to purchase.

Viewers can buy one heart for $0.99, two for $1.99, or 3 for $4.99. It’s reported that initially, creators will receive 100% of the revenue from Instagram Live badges sales.

Creators can also see how many hearts a viewer has purchased thanks to a visual icon in the chat stream, making it easy to see who is supporting them for a shout-out.

If you’re an influencer and would like to be considered for early access to badges, you can fill out this form.

Instagram Monetization #6: Instagram Live Shopping

There’s no denying that Instagram Live has experienced a bit of a rebirth amid COVID-19.

In fact, Facebook has reported a 70% increase in Live views from February to March as creators and brands found new ways to embrace the platform during social distancing.

So it seemed like a natural progression for Instagram to release Instagram Live features that would help support small businesses and communities during this time.

Enter: Live Shopping!

instagram live shopping

Soon, sellers, brands, and creators will be able to tag products from their Facebook Shop or catalog before going live and those products will be shown at the bottom of the video so people can easily tap to learn more and purchase.

Tina Craig (@bagsnob) was one of the first to use the new Live feature promoting her latest product launches from her brand @ubeauty.

instagram live shopping

This one small change makes for a serious switch to a QVC-like, live shopping channel! Now you can get purchasing advice live from the host — which means you can have a live Q&As with your audience, share product details, or give product demos, all with a live link to purchase at the bottom of the screen.

As Instagram continues to invest heavily in e-commerce and creators, we expect them to release even more features to earn money on Instagram.

Until then, the features we highlighted in this post should provide you with everything you need to turn your Instagram audience into real-life customers.

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