It’s interesting, with our business model, we’re beginning to generate different kinds of income. We’ve begun to take service income for logistics / kickstarter fulfilment, 3rd party sales income from selling on eBay & Amazon, income from in-person sales at conventions and at our open hours, consulting income and even passive income from our Youtube videos. Of course, our main income source is e-Commerce still and it’ll probably continue to be our main form, but it’s certainly interesting playing around with different forms of income.
The other aspect of these different forms of income is that it helps smooth out instability in other areas. We get advertising income from our Youtube videos and that should, over the next fewyears, continue to generate a decent amount of funds. It’ll never be a large amount of money since we develop our videos for a niche audience in our niche business, but it’s a nice addition and often seems to be quite stable.
Perhaps the area that we’d love to exploit and develop further is service income, from our Kickstarter Fulfilment to consulting. It’s something we’ll have to slowly develop, between working on our other businesses.
Affiliate marketing; boiled down to its essence is the process of trading eyeballs for sales on other people’s sites. It’s not always sales – sometimes you get paid for an action (signing up to a newsletter, visiting a certain page, etc.) but it’s mostly about sales. It’s also one of the more popular revenue streams available, so let’s do the Pros and Cons.
- Low cost of entry. All you need is a website to start. Once you generate the traffic, you can get the links for the various affiliate sites to develop your sales.
- No inventory or customer service hassles
- Can be an extremely passive form of income – once the website is up, the processing of sales/etc is left up to the affiliated company, not yours
- Easy to enter / work with multiple websites with multiple industries, allowing you to experiment with profitability
- Can be mixed with other revenue streams like advertising very easily
- Extremely competitive marketplace partly due to the low cost of entry
- Can take a long time to develop sufficient traffic to generate decent revenue. As you are sending traffic away, you get approximately 50% of all visitors at best to the affiliated site. Those then convert at between 1-3%; so traffic must be significant.
- You are dependent on 3rd party sites, for both payments as well as the processing of the orders and overall conversion rates / usability of other sites
- As majority traffic is often generated directly from search engines / referrals (especially for smaller sized sites); you are most liable to Google algorithm changes