Diversify to Survive
© 2002 Elena Fawkner
Over past few weeks and months news headlines have been focused on Wall Street and downward spiral of all of major stock indexes. As usual when one of these shake- outs occurs, popular media tries to reduce issues to easy to understand, bite-size morsels. A favorite strategy is to profile a "typical" small investor who had all his eggs in one basket when market crashed and now his entire life savings are nothing more than red ink on his personal balance sheet.
Had our typical small investor diversified his portfolio, investing some of his capital in blue chip stocks, some in tech stocks, some in property, some in bonds, chances are he would still be in black. The same can be said for anyone running an online business. The online environment is so dynamic and volatile, and so many so-called "hot" opportunities come and go (and don't do much in between), that devoting your entire enterprise to just one product or service offering is nothing short of dangerous, if not outright foolish.
The answer, then, is to place a few eggs in several baskets, so if bottom falls out of one, you can still make an omelet with what's left. In other words, diversify your product and service offerings to generate multiple streams of income.
SOURCES OF INCOME
Here's five ideas to get you started:
1. Affiliate programs. 2. Own products and services. 3. Website advertising. 4. Ezine advertising. 5. Content access via subscription.
We'll look at each of these individually in a moment, but first, one important caveat. The concept of multiple streams of income does NOT mean you should rush out and add new products and services to your repertoire willy-nilly.
Whatever you choose to offer must be closely related to subject matter of your site. If your site is about pet care, don't try and sell saucepans. To do so is not only a waste of valuable time and other resources but you compromise integrity of your site's purpose, not to mention your credibility as an expert in your field.
But even more importantly than that, all traffic is not created equal. Sure, if you create a separate page on your pet care website just for your new saucepan line you may attract one or two site visitors you may not have attracted otherwise. But those visitors were interested in saucepans, not pet care. Once they reach your site they'll assume you've lost plot and click away faster than you can say "where'd he go?".
Far, far better to have fewer site visitors who are all highly interested and motivated by subject matter of your site (highly targeted traffic) than relatively more visitors who are only somewhat interested and motivated (untargeted traffic).
The return on your investment will always be MUCH higher from targeted traffic in form of repeat visits, referrals, recommendations and, of course, all-important sales.
OK, let's turn now to five sources of income.
The first and most obvious source of income is affiliate programs. I'm sure most of you are already well-familiar with concept but, if not, you can get a quick primer by reading article at http://www.ahbbo.com/affiliate.html .
To be effective as an income-generator, affiliate programs you choose should be closely related to subject matter of your site in sense that a visitor interested in your website content will also be interested in subject matter of affiliate program you are promoting.
To start your search for appropriate affiliate programs, visit http://www.associatesearch.com and/or http://www.refer-it.com .
While affiliate programs are a good place to start, you are working on commission. For significant, long-term, sustainable income you need to develop your own line of products and services. This does not necessarily mean you must personally create product or service; it just means you get to keep profits on any sale. You could, for example, sell products you purchase from a wholesaler. Under this type of arrangement, you buy product for a certain price and sell it for a higher price. The difference is your profit. The profit under this type of arrangement will, 99% of time, be significantly higher than commission income you generate with affiliate programs. If you don't want to bother with hassle of storing inventory and shipping orders, make arrangements for wholesaler to drop-ship orders to your customers instead.