Diversifying Your Revenue Streams as an Online Retailer
The ecommerce space is a highly competitive one, with the internet opening a global marketplace where small-to-medium-sized businesses are going up against gigantic international corporations. While this certainly creates challenges for smaller businesses, there is also opportunity.
The biggest entrepreneurs in the world didn't get to where they are by sticking with just one thing. Jeff Bezos started out selling books from his Seattle garage, but now runs a multi-billion-dollar ecommerce platform dealing with almost any product you could imagine, as well as streaming services, finance, and more. The UK's Alan Sugar may have begun his career with a market stall, but now owns brands in almost every industry there is.
The moral of this story is that diversity is a great thing, and those brands which can draw on multiple sources of revenue have a greater chance of success than those which don't.
To diversify one's revenue streams means to identify new ways to bring money into your organization and leverage those opportunities. At this point, you may be thinking this means acquiring new brands or starting up the next Netflix like our examples above, but the reality can be much simpler and require far less investment on your behalf.
In fact, you may already have the opportunities for alternative revenue streams at your fingertips, and all you need to do is find a way to effectively monetize them.
"The quickest route to becoming an entrepreneurial millionaire is not necessarily by making one product with a high-profit margin that flies off the shelves," said Co-Founder and CEO of Webmetrix Group, Imran Tariq. "You ideally should have multiple revenue streams in order to truly accumulate wealth. Creating multiple revenue streams doesn't necessarily mean you're going to start several more mini businesses. A good first step is to simply consider how much of what you do on a daily basis or how much you have can be monetized."
The best way to begin is to take stock of everything your brand does, what infrastructure you already have in place, and what fits with the brand you already have established. Opportunities for alternative revenue streams are everywhere, and it's on you to identify them and make the most of what you have.
Alternative Revenue Streams
If you sell a product, look at what other items are out there that could augment your existing offering. For example, if you sell cosmetic products such as makeup, you could diversify into removal products and cleansing items. People will often try and buy as much as they can from a single source to save on things such as delivery costs, so make sure your brand sells everything they might need while remaining true to your objectives and brand identity.
Maybe your company has been producing tutorial videos for some time and now has a decent-sized library of content instructing people how to get the most out of your products or services. You can take those videos and package them into a complete course that you can sell as a new product. Webinars are increasing in popularity and people are eager to get additional advice and instruction on the products they love. Going back to our cosmetics example, you could create courses on how to blend, contour, and any number of popular techniques.
Consider offering a premium subscription service to your customers. You can have a special members-only area of your website, where subscribers can access exclusive content, special discounts, and access to new products ahead of general release. You can even host special events, such as product launches, where you can wine and dine members while exposing them to your latest inventory.
"It's easy to build up residual streams but making sure that there's one source that's your real money maker and dependent on your own resources and talents will keep you in control of your own wealth," continued Tariq. "Employing these strategies can at least help you think through the ways in which your revenue streams can multipl[y] within the year. And, the more revenue streams, the more revenue."
There is no upper limit to the opportunities presented by alternative revenue streams, and you are only restricted by your imagination. We've presented a few suggestions above, but the sky is the limit. The only thing we will say is not to overstretch yourself and make sure that all revenue streams are congruent with and support your main offering.
Diversifying revenue streams is sure to be a hot topic at eTail Europe 2020, taking place in June at the Queen Elizabeth II Conference Centre, London.
Download the agenda today for more information.