PUBLISHED OCTOBER 2017
by Ebonye Gussine Wilkins, Founder, August Rose Press --
Watch Joshua Robertson's video recap of this article!
Ebonye Gussine Wilkins
With a little extra work, you can figure out the best kind of alternative revenue stream for your business.
An alternative revenue stream can mean many different things (and be called by a number of names), but my favorite way to define it is “making money in your sleep.” I know it sounds too good to be true, but it doesn’t mean you literally do nothing and money shows up. It means you’ve put in the up-front work required to create something that can generate money on its own. As an entrepreneur, it’s something you can work on adding to your business even if it wasn’t in your original business plan. With a little extra work, you can figure out the best kind of alternative revenue stream for your business.
What Is an Alternatative Revenue Stream?
Most people think an alternative revenue stream is just another product to add to your lineup. While this can be true (depending on your business model), there is a lot more to it. A good alternative revenue stream has three main components: 1) it’s not the main source of income for your business; 2) it’s not your flagship product or service; and 3) it must be related to what you already do.
For example, imagine you own a small coffee shop. In that shop, you might sell coffee, tea, juices, and smoothies. Those are your product offerings, and for this scenario, they make sense. But to make money from those, you need to always be brewing coffee, steeping tea, pressing juices, and blending smoothies. On a busy day, this means you will never stop working! However, if you had alternatative revenue streams, you could earn extra income selling related products and services, such as coffee beans, travel mugs, a tea sampler set, or even a coffee roasting service.
While this example seems easy enough, it’s a totally different story when you’re in publishing. Usually, it means that your entire business is focused on the creation, sale, and distribution of books. Since books can take a long time to create, and often require a lot of maintenance, you can spend your time doing only that and not getting around to making money other ways. This is where your alternative revenue streams can take your business from good to great. However, figuring out what that entails can be tricky, as there is no one-size-fits-all for publishing. But the best alternative revenue streams have three criteria that make them perfect to add to your business.
3 Criteria for Good Alternative Revenue Streams
The best alternative revenue streams create automatic earnings, and are evergreen and on-brand. These criteria will ensure that the revenue streams will be hands-off so you can focus on your main revenue stream.
By creating automatic earnings (passive income), you are closer to achieving the “make money while you sleep” dream. The catch is, passive revenue streams require a lot of up-front work (for product/service creation and setup), but they have long-term benefits. One example is creating an audiobook version or supplemental audio content for a paperback that you already sell.
By ensuring that your alternative revenue stream is evergreen (low to no maintenance) you are freeing up your hands-on time for the future. While most content is not truly static, a lot of different kinds of content can have little to no maintenance. For example, an audiobook is recorded once and then can be sold indefinitely. Since the content of the book isn’t likely to change (especially not often), you can almost set it and forget it.
By focusing on keeping any alternative revenue stream on-brand, you are ensuring that your product or service makes sense and adds real value to your customer. If you have a book on yoga, for example, an audio recording from the author featuring meditative exercises can be useful for someone on the go.
What Does it Look Like in Practice?
Creating an alternative revenue stream that fits the three criteria can be accomplished several ways, but good places to start are digital products, affiliate links, and partnerships.
Digital products are usually products that you create yourself (or you can outsource to have them created for your exclusive business use). Using the yoga sample again, this could be the meditative and breathing exercises product (audio, video, seminar, etc.) that you make or commission. Once these recordings are ready, you can put them up for sale. Depending on what your customer needs (or the different ways that you want to offer the product), these recording can be repurposed for different uses. A downloadable recording can have great value for a customer who uses their phone as a listening device, or burning it onto an audio CD can be useful in a car or at home on the stereo. (If you create both, you’ve created two related products from one content creation venture!)
Affiliate links are monetized links that give you a percentage of the sale of someone else’s product or service. With this method, you don’t have to create the product or service, but you will need to set up the link (where permitted and authorized by the seller). While this can be the easiest way to do it, you must disclose that links you create are affiliate links and that you will get a percentage of the sale just for hosting that link. This applies on every medium where you post your affiliate link. In many cases, hosting that link will not cost the buyer extra, and you still make money. For this example, having yoga equipment for sale (that is recommended in your book) is a great way to put affiliate links to work.
Partnerships involve combining something that you’ve created and something that another party has created (with their knowledge, willingness, and permission) to offer something new and of value to a customer. This is a situation where both parties stand to gain something. For instance, you may choose to partner with your yoga author to offer an incentive (such as a discount) to a private online course with the author. The author in turn can refer customers to buy their current books and even lay the foundation for pre-sales of a forthcoming book. While not every partnership has to be as intimate as this, there are a variety of ways to take advantage of mutual interest to gain additional sales and recognition from your customers.
One or more of these ideas may prove useful to you, but you should only implement and test one at a time to ensure that it is producing the results you want. Over time, you may be able to grow your passive, alternative revenue to a point where it becomes a sustained, profitable addition to your company’s lineup. The more money you have coming in passively, the more attention you can use to focus on publishing books.
Ebonye Gussine Wilkins is a social justice writer, editor, author, and founder of August Rose Press.