| by Arthur O'Hara © Copyright
Over recent time news headlines have
focused on world markets and the downward spiral of major stock indexes. When this occurs, the media try to reduce relevant issues to easy to
understand, nibble-size articles. A favourite strategy is to outline a
"typical" small investor who had all his eggs in one basket when the
market crashed and now his entire life savings are in the red on his
balance sheet.
Had he diversified his portfolio,
investing some of his capital in blue chip stocks, tech stocks, property
and bonds, the chances are he might still be in the black. The same can be
said for anyone running an internet online business. The online
environment is so dynamic and volatile; many so-called "hot" opportunities
come and go (and don't do much in between), that devoting an entire
enterprise to one product or service offering is nothing short of
dangerous and foolish.
The answer is to place a few eggs in
several baskets, so if the bottom falls out of one, you can still make an
omelette with what's left. In other words, diversify your product and
service offerings to produce multiple streams of income.
SOURCES OF INCOME
Here are five ideas to get you started: -
1. Affiliate programmes.
2. Own products and services.
3. Website advertising.
4. Ezine advertising.
5. Content access via subscription.
Each of these will be individually
assessed in a moment, but first, one important warning. The model of
multiple streams of income does not mean you should rush out and add new
products and services to your repertoire willy-nilly.
Whatever you choose to offer must be
closely related to the subject matter of your website. If your website is
about wool, don't try and sell coal. To do so would be a waste of time and
other resources and also compromise the integrity of your website's
objective, not to mention your credibility as an expert in your field.
More importantly, all internet traffic is
not created equal. If you create a separate page on your wool website just
for your news on selling coal you may attract one or two site visitors not
have otherwise attracted. But those visitors were interested in wool, not
coal. Once they reach your site they'll assume you've lost the plot and
click away faster than you can say, "Ye What Gay?"
Far better to have fewer site visitors
who are all extremely interested and motivated by the subject matter of
your website (highly targeted traffic) than relatively more visitors who
are only somewhat interested and motivated (untargeted traffic).
The return on your investment will always
be much higher from targeted traffic in the form of repeat visits,
referrals and recommendations and, of course, all-important sales.
Now let's assess the five sources of
income.
AFFILIATE PROGRAMMES
The first and most obvious source of income is affiliate programmes. Most
of you familiar with the concept but, if not, you can get a quick briefing
by reading an article at
http://www.ahbbo.com/affiliate.html/
To be effective as an income-generator,
the affiliate programmes chosen should be closely related to the subject
matter of your website in the sense that a visitor interested in your
website content will also be interested in the subject matter of the
affiliate program you are promoting.
For starters on your search for affiliate
programmes, visit: -
http://www.associatesearch.com and/or
http://www.refer-it.com/
OWN PRODUCTS
While affiliate programmes are a good place to start, you are working on
commission. For significant, long-term, sustainable income you need to
develop your own line of products and services. This does not necessarily
mean you must personally create the product or service; it just means you
get to keep the profits on any sale. You could, for example, sell products
you purchase from a wholesaler. Under this type of arrangement, you buy
the product for a certain price and sell it for a higher price. The
difference is your profit. The profit under this type of arrangement will
be, 99% of the time, significantly higher than the commission income you
generate with affiliate programmes. If you don't want to bother with the
hassle of storing inventory and shipping orders, make arrangements for the
wholesaler to drop-ship orders to your customers instead.
You can always create your own products.
A good option for an online business is a digital product such as an
e-book since production and distribution costs are extremely low. Your
customer simply downloads the product from your server to their hard disk.
But you don't have to restrict yourself to digital products. You might
choose to write a book and have it professionally bound and printed. Or
you may choose to make your book available in both digital and traditional
format with different price points to reflect the different production and
shipping costs.
WEBSITE ADVERTISING
Once you have generated consistently high, targeted traffic to your
website, you can begin to think about charging for third party advertising
on your website domain. The price you can charge for banner advertising
depends on your traffic and whether your advertiser pays you to simply
host a banner or whether they pay you per click-through. If your revenue
depends on click-through it is especially important (both for you and your
advertiser in terms of repeat business) that your advertiser's product or
service is relevant to the overall subject matter of your website.
Your pricing would generally be set at a
CPM rate, for example €20 per thousand page views. The more targeted your
traffic, the more you can charge as your CPM.
EZINE ADVERTISING
A great way to generate traffic to your website is to publish an ezine
(electronic magazine or newsletter). Ezines are a great traffic generator.
But they can also be a source of revenue in their own right. Once you hit
1,000 subscribers (as a general rule) you can start charging for
advertising in your ezine. The CPM rate is a good pricing model to start
with. The more targeted your subscriber database, the higher your CPM.
Some very highly targeted, specialised ezines can charge as much as €40
CPM or more. Others that are very general and untargeted may only be able
to generate €2 CPM. The more time and effort spent in targeting your
market audience, the higher your potential revenue.
CONTENT ACCESS
The number one commodity people are looking for online is information.
Consider making your website content available on a members-only basis,
charging a membership fee for access. Your content, however, has to be of
genuine value to your website visitors. Don't try this if all you're
offering is a collection of other people's articles.
The type of content that lends itself
well to this type of arrangement includes things like apartments for rent
listings, home-based job openings, that sort of thing.
Members-only sites that consist of a
collection of freely available products and tools can also work well if,
by joining, the member saves him or herself many hours of independent
searching and collating the relevant information.
Entertainment type content also lends
itself well to a pay-for-access type arrangement. The obvious (if
untoward) example is the highly lucrative internet pornography industry.
Say what you will, it is a business model that most online entrepreneurs
would love to be able to replicate in their own industry, if only they
could generate the same level of interest. It's that targeted traffic
principle yet again!
These are just a few ideas to get you
started. Once you start implementing these, others will suggest
themselves. It really doesn't matter what you do so long as it works for
you. If something works well, don't stop what you're doing. Don't rest on
your laurels either. Make sure you always have other wells to drill if
today's runs dry.
End. |
