Your Income Stream
So, now we come to
everybody's favorite topic, how to make money from an online business?
;) Unlike an offline business, where usually the only profits will
come from the sale of your products, an online business offers you the
possibility of multiple income streams.
The following
lists the various ways you can earn from your online business:
Sales.
A pretty
traditional way of making money is to sell your product. Works as well
online as it does offline. :)
Affiliate
Programs.
You can join
affiliate programs to promote another company's product. When you make
the sale, you will be entitled to a commission. This is a good way to
start if you don't have your own product, or don't want to keep stock or
receive payments.
Take your time and
shop around for an affiliate program that pays well. It's not easy
selling on the net and I would expect to be well compensated for my
efforts. I would consider a 20% - 30% commission as fair compensation
for my efforts.
Residual Income.
Residual income
can be defined as income derived not as a direct result of your efforts.
For example, you can sell web hosting at $10/month and get a 20%
commission, which works out to $2/month. If
your customer
renews the next month, you will automatically get another $2, without
any additional effort on your part. In fact, you will get $2 per month
for as long as your customer renews.
Another way you
can earn residual income is from the efforts of your referrals. Most
affiliate programs have at least a 2-tier structure, allowing you to
earn some commission from the sales of your referrals.
A word of advice
if you are planning to build a business from the residual income from
your referrals - hope for the best but prepare for the worst. A full 90%
of your referrals will probably sit on their behind and do absolutely
nothing while 9% may bring in a sale or two. Only 1%, if you are
lucky, will perform well.
Advertising.
There are many
ways you can earn advertising revenue from your site. You can enter into
a private deal with another webmaster to display his banner on your site
for x dollars per month. Or, you can join a banner exchange and display
banners for cash.
You can maximize
your advertising space by introducing popups, popunders or slidein ads,
but the general rule of thumb is - one is more than enough. Many
surfers find these irritating but will probably tolerate one, but not
more.
However, with ad
rates being rather low, advertising revenue will just supplement your
income. Unless you have a very popular site, your fortune will not be
made in advertising.
Subscription.
If you have
information that surfers will pay to access, then you can consider a
subscription-based site. Surfers will pay a one-time fee, or monthly
fee, to have access to your site. Or you can have a free site, but a
subscription-based newsletter.
