Two years ago I wrote a post explaining how I make money.
A lot has changed since then. And since tell-all posts on income are some of the most helpful ones around, it’s time for an update.
Here’s the big change: It’s no longer how I make money, it’s how my company makes money.
My team for Socialexis, a content marketing company, has grown to 10, and we often work with an extended network of freelance writers as well. (I’m still the only employee of my business, with the team under contract status… but that might change in the coming months.) We bring in a whole lot more revenue than two years ago, but we have higher expenses, too.
For today though, we’ll skip the expenses side and focus on incoming cash. Here’s where our revenue comes from:
For a while I resisted growing the client side of the business, but now I’m enjoying it more than ever. This is largely because of our no-stressful-clients policy, which I enforce vigorously. (Click to tweet this.) If a potential client even smells like they might be impossible to please or overly demanding, we don’t sign a contract.
This is a lot more difficult than it sounds, because it’s hard to say no when someone wants to hire you. But passing up good projects means making room for even better ones. We’re fortunate to have both a full roster of current clients and plenty of leads coming in the door, which allows us to be picky. Now that we’re sticking to this policy, serving clients has become far more enjoyable. It’s fun to help our clients succeed!
So far in 2014, client work accounts for about 70 percent of our revenue. While I’ll gladly go into more detail on product sales (see below), I’m not going to reveal exactly how much that 70 percent is; divulging revenue figures is a bit more complicated when it comes to client work than digital products.
What I will say is that most of our client revenue is recurring. That means we collect the same fee from the same clients month after month. Occasionally we’ll work on a one-off project we feel passionate about, but monthly retainers work in our favor: we develop long-term relationships with most of our clients, which means better results, and we can count on the income. Win-win!
If you’re wondering how we serve our clients, you can find more info here. We specialize in managing blogs for startups and small businesses: everything from recruiting writers and creating the content to optimizing for SEO and hitting publish. For many of our clients, we also help those blogs reach their potential through social media and email marketing.
I now offer seven ebooks and courses on AlexisGrant.com, but about three of those account for nearly all of the product income from that site.
How to Create a Freakin’ Fabulous Social Media Strategy consistently brings in the most revenue each month, followed by How to Build a Part-Time Social Media Business. We sell about the same number of both ebooks, but since the strategy guide is priced higher ($59) than the part-time biz guide ($24), it brings in twice as much revenue. These ebooks also play off each other; readers who purchase one often end up purchasing the other, too.
Most of the buys for those ebooks come through search. I realize now that I’m writing this post that I should figure out the conversion rate, but even without the data, I know it’s high because this blog doesn’t get all that much traffic. Traffic has decreased pretty significantly this year, actually, to about 10,000-12,000 uniques monthly, since I only write every one or two weeks and am no longer focused on traffic-building strategies like guest posting. That’s OK though, as quantity isn’t the goal here: quality is. And this is a high-quality audience reading right now!
In many ways, my email list is more important than web traffic, as my relationship with readers is more intimate there. (Sign up for the newsletter here if you want in.) The list has slowly grown to 5,000+ subscribers, and we’ve maintained a 30 percent open rate. How? By providing consistently valuable information.
My Twitter Power course also does well, but I only run it every few months. The revenue from the ebook I released earlier this year on Kindle, You Deserve to Love Your Job, is practically negligible, as it sells at a much lower price point ($4.99) than my guides, which we sell not through Amazon but on my own site. We expected that, though; we released that ebook more as a brand-booster and community-builder than a revenue-generator.
My ebooks and courses bring in between $1,500 and $5,000 each month with little-to-no marketing, largely because we’ve optimized well for search. The margin on ebooks is incredibly high, which is why I’m trying to step away from client work long enough to write and release another one. Next up is a guide I’m co-writing with my accountant dad on all the financial stuff you need to know to run your own business. During the last couple of years, I haven’t devoted as much time as I’d like to creating products, as client work and team-building has taken priority — but I am determined to say “no” more in the coming months so I can get this ebook out by the end of the year.
We also now have significant product revenue from The Write Life, a website we launched about a year ago. Our bundle sale in March brought in $34,000. And while we put all that money back into site, it still goes toward our bottom line.
All in all, product sales account for 27 percent of revenue so far this year.
I never recommend affiliate sales as a way to make big bucks, because you need high traffic to make even a few dollars from other people’s products. If you do bother with affiliate sales, focus on selling high-ticket items whose creators offer 50 percent commission (that’s standard amongst digital entrepreneurs). Making a few cents here and there off Amazon sales doesn’t begin to add up until you’re seeing 100,000+ uniques monthly.
Affiliate sales have accounted for 2 percent of our total revenue so far this year. A big chunk of that is earnings from webinars I hosted for other people who sold their products to participants (I don’t do that often). We’re also making $175-$300 in affiliate revenue on The Write Life each month. That barely puts a dent in the $1,300+ we spend to run the site each month, but it’s something!
If you enjoy these nitty-gritty details, I highly recommend income reports from Steve Scott and Pat Flynn. Both of those entrepreneurs detail exact figures in their reports, which is helpful when you’re trying to grow your own online revenue.
Are you a fan of other income reports? If so, please share the link in the comments so we can all benefit.
And, of course, if you have any questions about how we make money online, I’m happy to answer below!