I am not one for income reports (in fact I dislike them and I will tell you why in a future post), but this one was warranted because of an upcoming challenge that I am getting ready for.
Because I plan to publicly open my Kimono during the challenge (you have the right to close your eyes), I felt some background is necessary on why I am getting involved in this challenge. I felt this post was not only needed, but also timely given what I am about to embark on.
I will preview the challenge in the next few posts so stay tuned for more information on that one.
But for now, let’s dissect some numbers…
I will explain what each letter (income stream) refers to below.
This is a screen shot of one of my bank accounts belonging to one of my entities that is comprised of three very interrelated semi authority websites.
If you have read my previous posts in the archives, you may have noticed that I typically group multiple websites under one umbrella business entity for various reasons. When I say entity, I simply mean a legal business structure such as an LLC (Limited Liability Company).
Basically, each entity or company has a set number of web properties under it, and the entity as a whole then has its own EIN (Employee Identification Number), bank account, vendor accounts, affiliate accounts, etc. This way, if I was ever to sell the business (in this case the entity), I can easily transition over all the accounts to the buyer.
The websites that make up this entity are all in the specialty finance niche. Finance is where the bulk of digital ad revenue dollars float in. In other words, financial products and services are the most highly spent on or spent after at least in the online space.
Have a read at where and how Google makes most of its online advertising revenue to put things in perspective. Although I don’t have factual data about the offline space, I am willing to bet that the story remains the same.
Fact: Facebook rakes in roughly $4Bn in annual advertising revenue
Now the reason I decided to lump these particular sites together is because of the interrelationship of these topics and the product and service mix they offer.
For example, imagine creating a website about birds, and then one about bird cages followed by one about bird seeds. Do you see how or why someone interested in one may also be interested in the others? This is not only a good way to leverage traffic and readership between your web properties, but also a great way to up sell and cross sell products and services.
The difference of course is while bird seeds and cages may cost you $10 to $100, the products and services in these financial sites average in the thousands of dollars, and even in the hundreds of thousands. And although I don’t believe I have reached the million dollar spender (there are several multi-million dollar online businesses targeting that specific client), the offering of these websites satisfies the million dollar appetite as well.
The two relatively large numbers other than Google Adsense that you see in the image are a result of the product pricing structure that I referred to above. These are lead generation commissions. The beauty of these is that they are passive and residual in nature. Basically, once you refer a client, you keep getting paid by the vendor as long as the client continues to do business with the vendor.
The best example I can give you is insurance. Once you purchase life insurance from your agent, each year you renew it, your agent makes a commission. If the same agent sells you disability insurance in the future to secure your number one asset, which is your career and the income from it, then the agent makes more money on an annual passive and residual basis.
Then you bring in your wife’s policies, your retirement accounts, and all sorts of other things. This is how the income keeps growing off of one client/customer only. The same principles are at work in the above example.
I picked these topics because of my educational and professional background. You can read more about me here. Given my background in the financial services industry, I know where the “real world” or offline money flows. Now I don’t know everywhere that it flows, but I know of a good number of avenues where it flows.
These websites are not micro niche sites either, so unlike micro niche sites where keyword research predicates everything else, my approach when establishing these websites was to start with what I knew first and foremost. I later conducted keyword research to create more content on sub topics that people are searching for.
The key here in a nutshell is that I started with topics I know inside out, or am passionate about, or have interest in, or have a STRONG desire to learn about and then followed with keyword research. Are these the topics I am most knowledgeable and passionate about? No. But I know a ton about these topics and enjoy them as well.
So am I then saying that keyword research is not important? No. It is. But it is not a deal breaker in many cases. It shouldn’t be at least. I think its importance was blown out to unprecedented proportions and we all got carried away mainly because of the niche site craze.
Could keyword research have turned me off given the data I saw? Possibly. But in this case, in spite of the not so ideal data from keyword research, I knew I could establish a successful website because I knew these topics inside out. In fact, as you can imagine, from a keyword research perspective these topics are relatively more competitive given their nature and the “players” in this field.
So the keyword research wasn’t exactly stellar, but I decided to pursue these anyway. I had made a commitment to make these sites semi authority sites because I knew it was going to take a lot of content, and solid content, to stand a chance against the big boys. Semi authority sites are what I refer to as websites that are built with a decent amount of content. However, the content is expert content in that the writer knows about the topic inside out, thus the authority aspect.
When I observed the competition that was ranking high on search engines, I noticed that most were actual service providers that had relatively large websites, but disparate in nature in terms of content coverage. Those that focused very narrowly on either of the topics I chose were relatively thin compared to the sites I had committed to establishing.
The old adage that content is king remains true in this case. I created a lot of it. A ton of it. Way more than the competition has. As a result, over time, I was able to inch higher on search engines and claim a small percentage of a very large pie. Most of the time that is all we really need.
To give you some idea, these sites average about 80 pages each, with more than half generated by myself and the rest outsourced to expert writers and not just the lowest charging writer I could find on Elance.
I did not monetize these websites until a good 4 months into building and marketing them. The numbers you see above are roughly 18 months into these websites. Another anecdote that demonstrates that if you put in the work, the results will eventually come providing that your strategy and approach is sound (that’s actually the easy part).
Before I breakdown the income, I just want to emphasize here that there are two distinct ways you can establish multiple streams of income. I get so many emails from people asking me what else they can do to create new income streams. A lot of times they already have viable vehicles such as a website that is receiving decent traffic. Why look outside when the solution can be in your backyard?
Here is what I mean. You can surely establish multiple independent streams of income such as multiple websites each of which generate advertisement revenue (the replication or rinse and repeat model), or you can take an existing website that is already generating ad revenue and simply add more income streams to it. For example, repackage some of your content into an ebook and sell it on your website. Or add some affiliate offers. Leverage the traffic you already have.
You will have created multiple streams of income in either case. This is exactly what I did with each web property in this example, thereby establishing multiple streams of income per web property across multiple web properties.
Here is a breakdown of the earnings. A lot of these earnings were generated in May and paid out in June. As you likely know, many vendors pay at least one month in arrears. Some take much longer.
A – this is a royalty payment received from the Google Books program. I had recently submitted an ebook tied to one of the sites to test it out on Google. It made a whopping $15.59 for me in June.
B – this is the same ebook that has been selling on Barnes and Noble. Sales were actually better in previous months. But $94 in royalties nonetheless.
C – the same ebook once again, except on Amazon
D – this is the big one. An exclusive affiliate relationship with a vendor that compensates for each lead. Each lead can be worth tens of thousands and even hundreds of thousands to the vendor, therefore I am sure they are happy to offer a mere $13,909 payout in exchange for the leads.
E – $6,710.26 in Adsense. Some of these financial keywords pay in the $60+ range.
F – ($202) A check I issued to a local freelancer in town
G – $2,495 in private advertisements
H – $74.02 from Commission Junction (thinking about getting rid of this completely)
I – $222.36 in commissions from supplemental products I market on the sites as an affiliate
As you can tell the focus of these websites is primarily lead generation. That is quite apparent if you were to visit the sites. They are designed with lead capture as the first and foremost purpose.
The secondary focus is advertisement revenue. I will be focusing on shifting away from Adsense and concentrating more on private ad placements going forward.
The biggest understatement that I can give you at this point is that it took a lot of hard work and patience to get to this stage. I don’t think I can ever articulate that well enough in words to truly convey a true sense of appreciation for the work and time it takes. However, anyone can do it in their respective area(s) of expertise and that’s a fact.
I know that I invested a ton of hours thinking through and building out the content of each of these websites. Even when I outsourced some of it to expert writers, not only did I pay a good amount for their work, but I spent just as much time reviewing and adding my thoughts on each piece as if it were my very own. Content relevancy and congruency is huge for me, and Google Penguin will agree with that!
And after having said all that, there are two main things I want to conclude this piece with:
First, I will be publicly experimenting with an online project from start to finish (if you can ever call something a finished product). This will be around a topic I not only know inside out, but one that I live and breathe.
Second, the micro niche site craze took us away from what is truly important, including myself, who lost perspective for a minute and got carried away with several micro niche sites chasing the dollars. Sadly, but deservingly so, many of mine failed flat on their face. They were bound to frankly.
We often loose perspective when shiny objects are flashed in front of us. Every blogger, including myself was talking about niche websites, keyword research, the tools and resources and everything that came with it. We were all chasing a temporary solutions that eventually got caught up on by search engines.
It’s time to go back to the basics. It’s time to offer something we are true experts in.
Topic selection is still key, but for all the reasons we forgot when we chased solely the dollars. Let’s refocus on what has always worked and what will continue to work.
Let’s get real. Let’s put in the sweat. Let’s focus on what matters. Let’s focus on longevitiy. Let’s focus on expertise. Let’s focus on quality. And in doing so collectively, let’s focus on excellence, and success (money) will follow us . . .
What are you working on these days? Are you still chasing after the dollars or building a solid, long term sustainable business in a subject matter you know inside out? Are you for or against income reports? Why?
Generating income online is my number one source of passive income. And within that income stream, affiliate earnings are my largest income source.
Affiliate earnings result from selling products and services that I do not own, but maintain a relationship with the owner of the offering who pays me a percentage of each sale I generate on their behalf. Many companies maintain their own in-house affiliate programs, while others join networks such as Commission Junction.
If your online business model relies heavily on affiliate earnings, you will want to read this post in its entirety.
Most of us blindly trust companies, big and small when it comes to joining affiliate programs and promoting their products and services in terms of receiving the correct amount of payment we are due. We do this because because we don’t know how to track affiliate earnings, or don’t want to because it takes time and effort.
Many of us simply give the vendor the benefit of the doubt. The rationale goes something like this: “if they have an affiliate program, they must have the sophisticated systems in place to track and remit commissions accurately and timely”.
If you are nodding your head to that, stop nodding because I just found out that one of my sources of affiliate earnings did not pay me over $3,000 in affiliate commissions over a 3 month span.
These results are preliminary and my VA is currently working through the past 18 months to determine whether a larger issue exists here. What’s worse is that this company is a well known company, certainly not one that I’d expect to encounter hiccups in its affiliate earning tracking, accounting and distribution process.
I first realized there may be something going on a couple months back when my payment was significantly delayed. Each month, my VA sends me a spreadsheet detailing all my online earnings broken down by website and earning source. When I received the spreadsheet last month, I noticed a familiar number was missing.
When I looked into it further, I realized that I wasn’t being paid timely the last several months. I dug further and found several discrepancies in what my analytics were showing as sales conversions compared to what this company’s affiliate reports were showing as earned affiliate earnings. Very strange. I never would have thought. The company is currently looking into my account in detail to determine what exactly happened, how and why.
Tracking affiliate income can be a difficult task if we attempt to do it manually. In order to track conversions on our end as internet entrepreneurs, we need some sort of script or code that the company we are promoting puts on their sales confirmation page.
We then input the same script or code in our analytics software so that our systems can “talk” to theirs. Even a free solution like Google Analytics enables you to track sales conversions if you can provide a mechanism by which the analytics system can identify whether a sale has been made.
While smaller companies may not have the sophistication in the systems to manage large volumes of affiliate activity, I’ve realized that even big shops are no different in this case. You can find a discrepancy in your affiliate earnings just as likely with a big name as you are with a smaller business.
So what’s the moral of the story? Be careful. Similar to how retail organizations factor in a shrink percentage (due to product breakage, theft, etc) in their income projections, you can also factor in a loss percentage in your income projection and accept the fact that glitches will happen (especially undetected ones as you grow larger), or make a commitment to be on top of it periodically by engaging in spot checks and monthly reconciliations. This can be a big commitment.
How? You can do it yourself, which will take valuable time away from building your business, or you can hire a virtual assistant to help you with the chore. I have done the latter. But even if you engage a VA to help you out with reconciling affiliate earnings, you will have to work with the vendor you are promoting to obtain and set up sales conversion scripts in your analytics tool.
The issue you will likely run into is that not all vendors are willing to provide such script. Many simply don’t have the time or the willingness to create one for you. Others are even worse in that they won’t even take a script that you have developed and simply paste it on their product sale confirmation page. I have run into this quite a bit. If you have any suggestions for me, I am all ears?
If you are doing business online, affiliate relationships are something you are likely already in, or will be either as an affiliate or as a vendor that manages an affiliate program. Affiliate relationships are a critical part of online business. As we have seen however, the accounting and payment remittance aspect of it can be a bit dicey.
What’s my advice for what its worth? If your online business model solely reliant on affiliate earnings, start thinking about how you can diversify. Affiliate commissions, although a lucrative income stream, should not be your only income stream.
Has this happened to you? If not, are you concerned at all? Why or why not? How do we get comfortable that we are getting paid what we have earned?
Business Idea: For all the programmers out there, how about a software that tracks affiliate earnings and makes the accounting easier for internet business owners? Is there already such a tool out there?
In this post I want to discuss affiliate marketing and how establishing an eBook affiliate program can boost your sales instantly without incurring additional cost to your business.
But before doing so, the following are the previous posts of this series. I highly recommend you read these, unless you already have an eBook that you are selling online.
Establishing an eBook affiliate program is one of my favorite ways to leverage an existing asset (your eBook) to generate more sales revenues. The beauty of this process is that it is simple to understand, easy to implement and absolutely free thanks to the existing affiliate directories and affiliate marketing platforms that are built specifically for this purpose.
An affiliate program is where you have others promoting your product in exchange for a commission on every sale. Unlike advertising expense which is a sunk cost regardless of how many products you sell (or if you don’t sell any), you don’t pay anything if no sales are generated. When you set up an eBook affiliate program, you are instantly giving your eBook a chance to get more exposure because you now have several others promoting your eBook in addition to your own efforts. It’s like building your own army of sales associates for free.
The more commission you offer, the more you will find affiliates flocking to promote your eBook. This approach is especially effective because your affiliates do not need to have their own product, but can still make money by promoting and selling yours. The more money they make, the more you make, therefore they have every incentive to do well promoting your product.
If you are selling your eBooks on eBook stores online such as Amazon, they have an affiliate program (called Amazon Associates) where others can sign up and sell any product listed on Amazon. If you are selling your eBook on your own website or blog through ClickBank, a platform I discussed in my post on how to create an eBook, they too have an in-built affiliate program with an army of affiliates waiting to promote the next big product / eBook.
As a vendor (the person selling the product), you sign up with an affiliate program (let’s just assume ClickBank in this case) and list your product (in this case an eBook) for sale. ClickBank will then generate a unique affiliate link that you can provide to your affiliates (those who will help you sell your product).
You affiliates will then promote your product by marketing the affiliate link on their social media networks, websites and other means. Each month, the affiliate program platform (ClickBank) will send you a report showing all the sales generated by your affiliates as well as the related accounting (the dollars and cents).
The good thing about setting up an affiliate program this way is that you don’t have to worry about tracking, reconciling, accounting or any tax matters. The affiliate platform, in this case ClickBank, does all that for you. All you do is sit back and collect checks from ClickBank, who deducts all the affiliate commissions from your sales and sends you the remaining payment. ClickBank also ensures that your affiliates are paid timely and accurately. Isn’t that neat?
You do not have to go through an existing affiliate platform like ClickBank. You can certainly establish your own eBook affiliate program. However, there is a lot of work involved in not only setting up the program, but also in the ongoing maintenance, not to mention the administration burden as you will have to do all the tasks that ClicBank does as mentioned above.
The first thing you need to do after signing up with an affiliate program platform is determine how much commission you want to award your affiliates. Generally the higher the better, but then again a 75% commission on a $10 product equates to only $7.50. As you can imagine, both the percentage and gross dollars will be evaluated by your potential affiliates when they decide to promote your eBook.
Research the Internet to see what your competitors are offering. If none of your competitors have affiliate programs, a $7.50 payout per sale may work for an affiliate marketer in your industry who otherwise may not have a choice.
Another angle is to consider whether there are inherent monetization opportunities within your eBook such as affiliate links. If so, you may want to give away as much of your sales proceeds in commissions if you anticipate generating your own affiliate commission income on the back-end when your customers / readers click on your affiliate links embedded in the eBooks and make a purchase.
There is no right or wrong answer. Getting pricing exactly right is almost always a matter or trial and error. Regardless, making the offer as enticing as possible behooves your business objectives. Your affiliates will have their own network over which they have an influence, likely one that you do not have access to.
Many today have their own FaceBook and / or Twitter following. Many of those are really large networks. Many have their own websites, blogs and massive email newsletter lists to which they can market.
Don’t worry giving away 75% of a sale and keeping only 25%. That is 25% you wouldn’t have had otherwise if it wasn’t for the affiliate who marketed and sold it for you. The sooner you come to terms with this the more success you will have over the long term.
Once you have determined the amount of commission you want to give, spend as much time as possible explaining how the program works to your potential affiliates. One way to do this is by providing a link just for your affiliates on your eBook sales page. By clicking this link, potential affiliates can learn more about your offer and various other details you’d like to share.
Here is an example of how this link looks like on one of my eBook sales pages. Go ahead and click on the image to head over to the actual page where you can see the information I have included.
On this affiliate page, you want to emphasize the value of your product and how your affiliates can easily sell it because of what it offers. You want to provide your affiliates with as much guidance and help as possible to succeed. The more they succeed, the more you will.
Create some banner ads or marketing language that they can take from this page and use in their marketing efforts. The easier you make it for them to promote your eBook, and the more help and resources you provide them, chances are the more enthusiastic they will be in promoting your eBook.
To take things even further, you can offer special incentives and prizes to your top X affiliates. I have done this on two of my higher price point products and this promotion works like a charm, particularly if you are offering a prize of high value such as in Apple iPad.
And although I have not done this personally for my affiliates, several vendors whose products and services I successfully promote as an affiliate have sent me all sorts of thank you cards and presents especially over the holidays. I received several wine and fruit baskets just this past Christmas.
Although this article specifically referred to an eBook affiliate program, the broader idea applies to any product or service. For example, in the financial industry, stock brokers get a commission when they sell a stock or mutual fund because they are affiliated with those particular securities. Similarly, affiliate programs online work in the same way. Affiliates get a commission each time they sell a product or service they are affiliated with.
The lesson here is to take care of your affiliates and they will take care of you. Look at this process as an opportunity to build relationships with people in your industry who you can call upon in the future when you release your next product or service.
So there you have it, another post in our series on publishing and selling an eBook successfully. I hope you found this information valuable and actionable. In my next post of this series, I will discuss how to write an effective sales page to sell your eBook.
Readers: What are your thoughts on establishing an eBook affiliate program? Are there other tips and strategies I failed to discuss that you’d like to bring up? Do you have any questions or concerns pertaining to this topic?