That may sound like a hustle—and it can be—but distributing credibility via certifications is totally legitimate and so common that it’s almost invisible. Whether a high school diploma or a college degree, state board license or driver’s license, Social Security card or passport, or any industry certification, the structure is the same:

1. A trusted industry expert or organization or company or entity requires a minimum standard for identity, knowledge and/or performance and offers a certification that, if achieved, sprinkles Magic Credibility Dust on the heads of…
2. Folks meeting the minimum standard and proving their abilities, who can then show the cert to…
3. Other folks wanting third-party verification

This is a game where everyone wins. The folks wanting a third-party verification get a single piece of paper that represents the hassles of testing and verifying the certificate holder’s credentials, abilities, and knowledge. With a trusted certificate, they’re assured the holder: 1) is who they say they are, 2) knows what they say they know, and/or 3) can do what they say they can do.

The folks who acquire certifications get credibility-by-association, which is especially helpful for newcomers to a field. Certifications don’t replace real-world experience, but they do offer potential clients or employers that extra bit of proof.

What does the certifier get? Well, they get paid, of course.

So Where’s The Money?

The money is all along the certification process, from application and registration to training and testing to the piece of paper at the end. Here are some examples—

• Last week I mentioned Jim Horan, a consultant who earns passive income by certifying other consultants to resell his licensed One Page Business Plan system. He charges $2,800 to $10,000 for training and certification, as well as a $250-$750 annual license renewal fee.
• Microsoft administers their technical certifications through authorized testing centers worldwide, with exam fees at around $125. Certification tracks require up to 7 exams.
• Microsoft outsourced administration of their Office Specialist (MOS) certification to Certiport, who also administers exams via authorized testing centers, these at around $80 each. The Master Specialist track requires 4 exams, and the Master Instructor status requires all of that plus proof of teaching experience and a $95 application fee.
• Learn2Type offers a self-administered online typing test, where it’s free to take the test, but the paper certificate itself costs $19.99 plus shipping.
• BrainBench has 575+ self-administered online exams for everything from ASP to XML at $49.95 each, which includes a hardcopy certificate. They also have a subscription plan for $199 a year with unlimited access to their entire exam library.

So when I tell you Jim Horan has 400+ certified consultants paying $250+ annually to maintain their certification, and that Certiport’s 12,000 testing centers have delivered 5.5 million exams at $80+ each, and that BrainBench has delivered over 8 million exams online at up to $49.95 a piece, you can appreciate the earning potential in offering—or even just administering—certifications.

I bet you can think of at least 3 more certifications I didn’t list here…every industry has their own. When you have them in mind, put on your Passive Income Glasses and look closely at the setup. Is it passive income? Could it be?

Mmmm! Passive Income…

Clearly, the passive income part depends on what the certification is based on and how it’s administered. If the certification requires a personal interview with each applicant, then that setup is the opposite of passive income.

But if certification depends on background verification and testing, it’s easy enough to delegate the daily operations to staff, contractors, or technology.

Jim Horan’s applicants attend teleclasses that may be taught by him, but are likely facilitated by qualified members of his consulting team. Microsoft and Certiport both outsourced some, if not all, of their certification administration to partners. Learn2Type and BrainBench offer online exams that are 100% web-based, so staff need only print and mail certificates.

But you can already see trouble brewing, can’t you?

Fakers, Cheaters, and Other Credibility Killers

A certificate’s value is wrapped in the credibility of the certifier and/or the certification process. Obviously the certifier has to be trusted and respected, but the process has to do its share of the heavy lifting when it comes to establishing the certificate holder’s credibility. If the client or agent or customer doesn’t know, respect, or believe in what the certificate represents, it’s just a piece of paper.

For example, I’m an ordained Scribe. Seriously. The Universal Life Church openly offers free online ordainment. I typed my name in a box and clicked a button. Done! The only thing easier would’ve been wielding my pen as a magic wand and tapping my head with it. “Poof! I’m a Scribe!”

And while the certification seems a bit of a sham, the certifying body is totally legit—apparently my state recognizes ULC’s instant ordainment as proof of my qualification to hold marriage ceremonies. Still, it didn’t take much so it doesn’t mean much. The easy-peasy process is a credibility killer.

Fakers will wreck a certification’s credibility, too. MCSE bootcamps are legendary in the IT world for churning out legions of underqualified systems engineers—termed “Paper MCSE’s”—who are well-trained to pass Microsoft’s certification exams, but not necessarily able to handle the jobs their certificates get them. So while employers like to see these certs, they’re not a golden ticket.

And of course there are the cheaters, whose certifications are worth less than nothing. They memorize the answers from stolen tests, pay someone else to take the test in their place, or buy the certification outright from an unethical or unauthorized vendor. When word gets out that the certification can be bought, it’s absolutely worthless…forever.

But some credibility killers are built into the certification process by the certifier. For example, the BrainBench and Learn2Type exams are 100% online, and therefore 100% honor system. I’ve taken their tests, and I believe they are valid ability tests. But anyone at all could take the tests in my place, so what good are they at proving MY ability?

Also, I’ve seen would-be professional certifications (naming no names here), where the passing exam score was near failure by any other educational standard—a pitiful 63%. The certification’s stated benefit is it proves holders “have key job skills”. I’d begin or end that phrase with “barely”, based on the certifier’s low expectations.

Which is all to say that offering and/or administering certifications can make for great passive income, but it’s not without pitfalls and hazards and its fair share of rogues. If you take this on, step carefully and guard aggressively.

Some Last Thoughts

So developing a certification process that’s a passive income generator isn’t tough, and I’ve shared plenty of examples of people, organizations, and companies who are earning heaps of money from it.

The challenge is in gaining and maintaining the credibility that gives the certificate its true value. And it’s as much about the certification process as it is the certifying body…maybe even more.

Because above all, a certificate’s purpose is to provide proof that the certificate holder has demonstrated their knowledge or skills, and if the certification process is lame or flawed or easy to circumvent or nonexistent, it’s not worth a helluva lot to anyone.