Diverse Revenue Models for Digital Entrepreneurs - Must Have Solutions

Diverse Revenue Models for Digital Entrepreneurs

As an online entrepreneur, your job isn’t just about picking a niche and business model – it’s about knowing how you’ll monetize it. There are multiple ways to generate revenue, and you can start with one and scale your business to include different ones over time.

You can add the various revenue models to your front end products, upsells, or cross-sells whenever you find the perfect opportunity for them to be presented. It can be overwhelming to understand the multiple income generators, so we need to dive into each one so that you can pair it with your business model and niche topic for the ultimate profit system.

This is a good way to shore up your finances in a precarious economy, when there are downturns and algorithm shifts that can influence whether or not consumers find your offers or are willing to spend money on them.

A well-diversified revenue stream helps mitigate problems and ensures you’ll keep your head above water financially in any unforeseen circumstances. Plus, it’s just good business to maximize your profit potential in any and every way possible.

Each option may not be a good fit for your current business, but it’s good to be aware of the options so you can apply them at a later date if you decide to pursue something different at a later date.

Each of these income streams has its own strengths and weaknesses. Additionally, you’ll have your own personal preferences, skills and strategy that might influence which methods you choose to use.

Single Sale Transactions

The first, and most common revenue option is a single sale transaction. This is a one time sale where revenue is generated from a consumer purchasing something from you and then going along their way.

This is used with both tangible and digital products both online and in the offline world. As a consumer, you have used this countless times period and it will benefit you as an online entrepreneur, as well.

For example, if you want to sell a digital download info product like an eBook or video course, this would be a single sale transaction between yourself and the consumer. If you want to sell stock photos, access to a webinar, or even a service like a ghostwriting project, you could sell these as individual transactions.

There are advantages and disadvantages to using this option. On one hand, it's very simple for you to implement and manage. It's easy to scale because they can then purchase other items that you sell in the marketplace.

You can price these attractively so that you not only cover your costs, but you are also generating a good profit margin. But it may also present some obstacles for you. For example, you have no promise of additional income from that customer after the initial exchange.

You may also find it harder to emphasize the value you will continue to give to your clients if you are in a one time transactional situation. Plus, there is more competition for products that have a single sale transaction model than those where they have the option to become members, etc.

If you are going to choose this option, you want to make sure that you pack as much value into that product or offer as possible so that this customer becomes a repeat customer, even if each time they come back they are engaging in a subsequent single sale transaction.

Do your best to upsell your buyers and, if they get on your list, cross sell other products or services to them so that you can increase the value of that customer. This is a revenue option that you will most likely be using at some point in your business, and it's the easiest one to understand.

Recurring Revenue Models

Next is the recurring revenue model. Here, you are going to be generating ongoing income from a subscription based situation. Customers will be signing up to things like a membership, paying for licensing to your product, or paying for access to your product for as long as they want to use it.

This is a revenue model that you have to work on building the number of leads you generate and retaining those customers for a long period of time. You do that by continually providing value to those who are willing to spend money with you month after month.

There are many subscription based models online, and you may pay for those yourself. These would be things like Amazon Prime, where you get perks like free shipping or faster delivery.

You probably pay for other subscriptions to streaming sites where you can watch shows, and there are different tiers of access, such as eliminating all commercials or adding on a different channel.

As an online entrepreneur, you can create a membership program or service that you will continually update and enhance over time. If you have a piece of software that people want to license from you, you can charge them an ongoing fee to continue to have access.

With a recurring revenue model, you're going to have a steady income, provided you continue to share value with your customers. Your obstacle will be in convincing people to commit to an ongoing payment, so you have to find ways to acquire those leads who are willing to do that, and then meet their expectations once they have signed up.

Freemium Business Models

The name may sound contradictory to building revenue, but a freemium business model can actually generate a lot of profits. This is where you present a product or service for free initially, with your monetization coming from premium features and access later or as an add on option.

Premium revenue models work very well because they are attractive to consumers who view the no cost option as something they have to have. It's very hard for many consumers to resist something that costs nothing.

Your goal, in this instance, is to convert those free product seekers into dedicated, paying customers who are willing to spend money because you have shown such good value with your free model.

One of the biggest perks about using a freemium option is that it creates a buzz and lowers the barrier for people to convert. Then, they will be on your list and you will be able to nurture their needs and convert them into customers who spend money.

This is a business model that can be upsold easily. They have not had to spend any money initially, but they have shown interest. Therefore, you can get them to sign up for a recurring option or even a single sale transaction once you have proven your worth to them.

The key in making a freemium business model work is for you to not only show value, but to have just enough features that make it attractive without eliminating the need for them to invest more for something better.

You might even want to give them a taste of a premium level option so that they can clearly see the difference between what they are getting for free versus what they could get if they were willing to spend a little bit of money.

Passive Income Options

With passive income, you are going to be generating revenue behind the scenes on autopilot. This is a wonderful option where you can do the work once and get paid for it over the coming weeks, months, and years.

This is an especially attractive option for those who want to work less and earn more. A recurring revenue business model will require you to continually show value to your users in most cases, whereas a passive income stream is a set and forget situation.

For example, setting up a line of info products once allows you to earn from them ongoing. Writing affiliate reviews for your blog one time and letting them gain ranking in the search engine results page and convert for you is passive income.

Ad revenue for content you write one time and publish on your blog is another form of passive income. These are easy revenue streams that, if you publish carefully and strategically with value, will pay off for you again and again.

You will have an upfront investment of time (and in some cases, a small amount of money like for a domain and hosting), but it’s easily scalable into something more. You do have the responsibility of upkeep and customer service.

Crowdfunding and Donations

Crowdfunding and donations are two different things, but they come under the pretense of people giving you money up front for projects or for appreciation of your content. They are not necessarily downloading anything initially, like a product or getting access to a membership.

With crowdfunding, you are benefiting from the collective power of a consumer target audience that is interested in contributing to your project. Some authors use this as a way to support them while they complete a book, giving perks to those who contribute, using a variety of tiers, depending on their investment.

If you are going to use this option, you have to make sure that you deliver and follow through on what was promised, whether it's a product, an experience, or something exclusive that they have backed you to complete.

Kickstarter is a good example of a platform that allows you to crowdfund for your launches and the innovation that you are putting forth with your business model. Donations are a bit different, and you will often see this on social media platforms where dedicated and loyal followers of influencers will donate as a way to support someone who puts out content that they appreciate.

An example of a platform that allows you to do this would be Patreon. This is designed for content creators to get financial support from their audience, and in exchange, you can give them early access to content, additional and exclusive content, and other perks such as in person group meetups.

You’ll often find bloggers who have the donation option on their website. It's either called a tip jar or something like “buy me a coffee,” and it is linked directly to a payment platform where they can contribute a nominal fee to help you offset your expenses and earn some profits.

With both of these options, you have to make sure that you're providing value consistently, achieving your content goals, and being very honest and transparent about how the funds are being used.

It's important that you are engaged and attentive to the needs of your audience. If you can build a community of people who are connected in their support for you, that will help elevate your earnings.

Now you have a better idea of the various revenue options you have available to diversify your earnings as an online entrepreneur. Go through each one and analyze how it would work in connection with your particular niche, business model, and personal preferences so that you can get started with your first one and add others on later.


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