How We Make Money: Revenue Streams for This Online Business

August 18, 2014

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:

Income Stream #1: Client work

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!

Don't take stressful clients

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.

Income Stream #2: Products

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.

Income Stream #3: Affiliate Sales

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!

Other Insightful Income Reports

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!

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17 Replies to “How We Make Money: Revenue Streams for This Online Business”

  • Very cool Alexis that you employ 10 people. Are they full time or contractors?

    My business model is flipped. Affiliate and books is 90%+, and services is the rest. I strictly limit my services clients to three max a month as it takes a lot of time, but I also consult 25 hours a week with one client, so I guess that takes up most of it.

    Working in my second ebook now. Not sure whether to publish it for free or charge $5-10 and donate all but a $1 to charity. Whatcha think?

    • Alexis Grant says:

      Hey — They’re all contractors, but we work together like a full-time team, as many of these folks have been with me for a few years. Enjoyed hearing about your revenue pie, too! I’d say think about your goals with your next ebook — money? grow your email list? land clients? — and choose a route from there.

  • Tim says:

    Awesome stuff, Lex! 30% open rate is huge. Just signed up to see what you got going on in there :).

    Also – for those who are interested in affiliate sales, I offer a 60% commission on my book about using Mint.com (which Alexis edited!) called The Mint Manual. Check it out if interested.

  • Matt says:

    Very interesting stuff, thanks for sharing. It’s very cool to see how you’re company has grown over a relatively short time!

  • Jamie says:

    I have a similar writing business and at one point was working with several other freelancers to help me with the work. I found I was spending so much time managing that aspect of it that I wasn’t writing (and not getting paid enough). How do you deal with that in your own business? I personally would rather spend my time writing for others rather than managing writers.

    This really encourages me to actually write the ebook I have been planning for a while!

    • Alexis Grant says:

      Hi Jamie,

      First, what’s your ebook about?

      Re: managing — I do spend less time writing now and a lot more time managing, delegating, creating systems, landing clients, recruiting writers and editors — all the aspects of running a business. But I still help edit a lot of our work, and I always carve out time to write this blog — so I feel like I get enough writing in to feel satisfied.

      Re: the money side, I find I can make more this way because it’s scalable. I’ve built systems that allow my team to do far more quality work than I could ever do on my own. But if you want to “just write,” it’s not the right choice for you!

      • Jamie says:

        I certainly don’t mind some management, but did not ever find an adequate way of making it “worth” the money that was coming in and yes, I would miss doing most of the writing. I waffle between wanting to stay small and having something that can be grown.

        My ebook (I have several in my head but this one is for business) is about how and why to start a corporate blog. I teach seminars on the subject on a fairly regular basis.

  • Lee J Tyler says:

    Alexis,

    Thank you for this insightful report! You have built a solid structure for your business. It is something that you should take great pride in as it certainly is not easy.

    Your “no stress” policy is golden! That makes every day brighter, doesn’t it?

    I am trying to decide whether to take a marketing report that I’ve been researching and sell it, fold it into a conversion incentive or, as many A-listers advise, make it into a series in posts. (Re: Give them more than they expect.) I am thinking of offering it as a series to my subscribers and frequent readers and then taking it off the site to roll into an incentive to bridge the above advice. I am busy writing for an anthology and continuing my own writing life as well as working on a marketing intensive, so there is little time to create all that I want.

    You have inspired me to think in different ways and I thank you for that!
    My best to you,
    Lee

  • Thank Alexis! You always inspire me and share so much value. I’m working hard to build my business. Being a bootstrapper things are taking longer than I’d like. Nevertheless being a part of your tribe has been helpful. Thanks and wishing you much more success!

  • Amy Stark says:

    Alexis, loved our blog post. I really like your “no stressful clients” policy. Not too long ago, I started working with a guy I met through a former client. He seemed really nice and highly motivated. Then, not far into his project, he stopped being reachable, didn’t return calls or emails. Ugh! Not worth my time or effort. Thinking of writing a section into my contract that says clients and contractor (me) must respond within 48 hours. Any thoughts?

    Anyway, thanks for sharing how you make your money. I look forward to your next e-book on finances!

  • Thomas James says:

    This is helpful, Alexis! I want to recommend your page for it really shows good tips and hints on how to start on doing online business and services. Looking forward for more here! Cheers!

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