Part 4: Online Business Revenue Streams 

Welcome to part four of the online business idea mini-series. In this mini-series, I’m giving you bits and pieces from my business ideas book Step One (a book about finding and validating your first business idea). This is part four of the mini-series. In this blog, I break down how to make money with the eCommerce revenue model, showing you 18 viable online business revenue streams.

You can access the other parts of my business idea series here:

• Part 1: What Type of Business Should I Start (Why You Should Be Starting an Online Business)
• Part 2: I Want to Start a Business, But Have No Ideas (Business Idea Generator Exercise)
• Part 3: I Have a Business Idea. Now What? – How To Test Your Business Idea (With Long Tail Pro)
• Part 4: Online Business Revenue Streams – How to Make Money with Ecommerce Revenue Models
• Part 5: Validate and Choose the Best Online Business Idea (Your Most Profitable Business Idea)
• Part 6: Next Steps -How to Build an Online Business (The Steps for Starting a Profitable Online Business)

Disclaimer: This is directly copied from Chapter Six of my book Step One. There may be references to the book, or other chapters, in this blog post. That’s because it is literally copied and pasted from the book to make sure you get all of the necessary content for free (but just a heads up, if I say “later in the book” or “in the next chapter”, that is because I copied this straight from the book).

How To Make Money With Ecommerce Revenue Models (18 online business revenue streams)

Now that you understand why I love online business (from Part One), why I love niche businesses, and why this is a logical starting point for your first business, let’s cover one of the most important questions on the top of every entrepreneur’s mind: “So… how do I make money?”

You start a business to make money. That is the primary purpose of a business, so it makes sense that it is top of mind when you are getting started. You do not want to work yourself to the bone for six months, working on a business that doesn’t make any money. A business that takes up your time but does not generate a profit is called a hobby, not a business. So, let’s cover it now before we dive into finding your first business idea.

In this section of the mini-series, I break down eighteen viable online business revenue streams,  show you how to make money with the eCommerce revenue model, and help you choose a product or service for each of your business ideas. When you have finished reading the section, you will understand a few of the most lucrative ways to make money from your business before you choose your business idea.

This is important. You need to understand the possible ways to make money so that as you are brainstorming new ideas, you can simultaneously envision how your business will look in the end. That way, if you decide to start a niche online business about hedgehogs, you can envision how to make money with a membership site, affiliate revenue, advertising, and physical product sales. The revenue generation opportunities are endless!

Digital Products (My Favorite of the Online Business Revenue Streams)

Let me start by saying that there are countless ways to make money from an online business. In this blog, I will introduce you to my 18 favorite monetization strategies. But there is one common theme throughout this blog. Digital products. My favorite of the online business revenue streams. Before we begin, let me quickly explain the concept of digital products. A number of the online business revenue streams that I recommend are digital products, so I want you to understand what a digital product is, and why I love selling digital products.

Can you type a few words in an MS Word document and then save it as a PDF? Great! Then you can make a digital product.

I love digital products. They are my go-to medium with every business that I start. A digital product is simply a product that does not have a physical form. It is an intangible piece of media that can be sold and distributed repeatedly online without the need to replenish inventory. This is usually some type of downloadable or streamable content such as MP3s, PDFs, and videos.

Digital products cover a wide range of potential products including eBooks, PDF guides, online courses, video courses, membership sites, newsletters, and audio programs. We could go on and on listing digital products. The point is that they are easy to create and easy to sell. They are the perfect product offering to begin monetizing your first business.

I built up my entire portfolio of online businesses selling digital products. The beauty of digital is that you create one product and then sell it over and over again without incurring additional costs. Think of an eBook. You write a quick book or guide that is no more than 50 pages long, save it as a PDF, and then sell that PDF to new customers every day. You did the work once, but then keep selling the digital product to new customers with no inventory, no overhead, and almost no expense other than the time you invested in writing the book. Here are some reasons why I love digital products:

• Scalable without inventory: You don’t hold inventory, and you can keep selling the same product; there is no limit to how many digital products you sell because you cannot run out of inventory.
• No logistical upkeep: You don’t hold inventory, and you don’t need to package anything. There are no shipping fees and no manufacturing struggles. Logistics are easy with digital products. Use a simple platform like WooCommerce that automatically sends the digital product to the customer after payment is received.
• No upfront cost: There is no upfront cost to create a digital product other than the time you invest in making it. You do not need to pay anything upfront to purchase inventory or warehouse space. No initial capital investment, overhead, inventory, or employees are needed.
• High-profit margin: There is no cost of goods sold with digital products. You create an eBook, save it as a PDF, and sell it. That is a 100% profit margin. Every sale, every dollar you generate, is 100% profit.
• Automation: Digital products are easy to automate; in fact, you can automate the entire selling and distribution process. That’s how you earn passive income. The customer finds you, the customer buys from you, and the customer receives your digital product without you ever lifting a finger.

Now that you understand digital products, read through the below online business revenue streams (my 18 favorite monetization strategies) and think about how you could implement each revenue stream in your business.

Online Courses

I love online courses; they are one of my favorite methods of generating revenue. A course can be a series of instructional videos teaching a particular subject, like my courses on how to build and scale an online business, or it could be a text-based course like my insurance courses for the CPCU designation. There are dozens of platforms designed to host and sell online courses, making it easy to publish a course without the expenses of custom coding or web design. My favorite platforms are Teachable, Thinkific, and Thrive Themes. I have used each of them to host and sell my online courses, which are an easy way to generate substantial passive income from your business.

Coaching

This includes one-on-one coaching, group coaching, live corporate training, and paid mastermind groups. Coaching is the process of helping someone in a one-on-one context. To be a coach, all you need is a cell phone or the ability to meet with people in person. For coaching, all you need is yourself, your expertise, and a willingness to help others.

This is one of the easiest ways to generate revenue from your business. I offer coaching as a supplementary product for every one of my businesses. At a minimum, you should charge $100 per coaching session, though you may be able to charge much more. For reference, when I first started The Entrepreneur Ride Along, I was charging $1,500 for three coaching sessions. That rate increased as I perfected my coaching practice. Coaching is an easy and profitable revenue stream to start with.

Take Kris Pavone, for example. Kris is my coach; he is a full-time life coach. He is paid to be a resource and guide who helps people meet their goals. Kris’s entire job is to meet people and help them. It is incredibly rewarding, and he gets paid to do it!

Here are a few types of coaching that you can monetize:

• One-on-one coaching: Coaching is the process of helping someone one on one. It is completely free to be a coach, and you can easily charge $1,000 or more per client. It is highly profitable and easy to start.
• Group coaching: Group coaching is very similar to one-on-one coaching, except you coach multiple clients at once. I run a group coaching program for my “Build a Business” course. I charge $1,000 per person and over the course of six weeks teach a group of entrepreneurs how to build and scale their first business. Much like coaching, this is highly profitable and easy to start.
• B2B live training: Business to business (B2B) training is coaching delivered to a group of employees, paid for by the employer, such as seminars and live coaching. This can be done onsite or online through a program like Zoom. This is what my friend Tom Heffner does; he books a corporate client like Starbucks or Porsche and charges $15,500 for a two-day training seminar to help corporate employees reach innovative solutions.
• Paid mastermind: The mastermind business model is similar to group coaching. The only difference is a mastermind is a group of clients who meet together weekly, with you and all members of the group present, with one member of the group in the “hot seat.” That member is given the opportunity to bring any topic or problem to the group for advice. With a mastermind, you are creating a group of like-minded individuals who come together in one group coaching call every week. Each member participates to provide help and guidance to one another. With a mastermind, you leverage the knowledge of all members to help everyone in the group advance toward their goals. You, as the leader of this group, facilitate the mastermind and provide group coaching when needed. This is a highly profitable revenue stream; you can charge between $500 to $3,000 per person per month to host a paid mastermind. I personally paid $1,000 per month to be in Cliff Ravenscraft’s paid mastermind group. Cliff generates upwards of $30,000 per month in revenue by hosting two paid mastermind groups.

For more information on how to book coaching clients, see my blog with step-by-step instructions on how to get coaching clients.

Books (print books, eBooks, and audiobooks)

You can self-publish a book on Amazon or Barnes and Noble for free. It cost nothing to do this. You do not need a professional publishing company. There are three types of books you can sell: eBooks, audiobooks, and print books.

The only downside to this revenue stream is the profit margin; books are low-margin products. For reference, when I sell a print book for $19.99 through Amazon’s KDP book printing program, I take home a profit of approximately $8.00. For audiobooks, I only make around $4.00 per sale. You need to sell a lot of books to make a living from selling books.

Books are a great tool for building an audience and building authority, but if you want to make a living from selling books you will need to sell 600+ copies per month. Not an easy feat unless you are someone like Tucker Max or Tony Robbins with a gigantic following. For example, you need to sell 625 books per month to generate $5,000 in income (about $8.00 profit per sale through Amazon’s KDP program).

Here’s a pro tip: combine this with the Amazon affiliate program to increase your profit per sale (more about affiliate programs in the next section). If you are recommending your book to someone, make it an Amazon affiliate link. Then you get paid for selling the book and earn an affiliate commission for recommending the book.

Affiliate

I love affiliate marketing. Affiliate marketing is one of the easiest ways to make money online without spending anything. As an affiliate, you recommend a product to someone. If someone buys the product, you earn a commission, typically 5% to 30%, on that sale. It’s completely free to you. You can sign up for as many affiliate relationships as you want. As an affiliate, you have a unique affiliate URL that keeps track of who clicks on your link and who buys after clicking on your link. Typically, you are credited with the sale and earn a commission if a person who clicked your link buys within 30 days.

Here’s a pro tip: look for affiliates that offer recurring commissions. I’m an affiliate for The Online Dog Trainer. Any time someone signs up for The Online Dog Trainer’s monthly training membership through my link, I get paid a 30% commission per month. It’s like building out your own membership platform without doing any of the work; all you have to do is recommend someone else’s product! I make $20 per month for every member that signs up at The Online Dog Trainer, and I typically have 20 to 40 active members that are subscribed through my affiliate link. That means I make $400 to $800 revenue per month simply for recommending someone else’s product. That’s easy money!

I have one cautionary note about the affiliate business model. I recommend it solely as a supplementary online business revenue stream. I highly recommend you have your own product, whether it’s a book, course, membership, or coaching. Affiliate programs are great and can make you a lot of money as an affiliate, but you do not control the product. You do not own the product. The company that owns the product can discontinue its affiliate program at any time, instantly wiping out your revenue stream. Or the program could cut affiliate commissions in half (that happened to me with the Amazon affiliate program). I still recommend the affiliate revenue stream but only as a supplemental revenue stream, not your sole source of income.

For more examples of businesses that make money with affiliate revenue, and a breakdown of how to make money with this eCommerce revenue model, see my blog: List of Niches – 20 Online Business Ideas for Beginners.

Membership site

I love the membership revenue stream. There is a bit more work upfront, but membership sites can scale quickly. There are hundreds of platforms that facilitate the whole membership process for you; I use WooCommerce Subscriptions because it is compatible with WooCommerce and WordPress (more about that in the free companion course). It handles everything for me. It sets up the customer’s account, charges it once a month, and lets me know if someone cancels their subscription. It manages the whole process.

Membership sites are awesome, but they can be tedious to start. Typically, memberships run between $20 and $200 per month. This revenue stream is slow at first because you need to work hard to get new members. Then, once you get a few members, you need to work hard to keep those members happy and paying, and then you need to work hard to keep new members coming in the door. But things snowball quickly. For example, in one of my businesses I have a membership with dog training tips, care guides, and all the information you need to know about the Pomsky dog breed. I charge $20 per month. On average, I book two or three new members per month. On average, I also lose one member per month. This means that after a month I’m making $40 (two new members minus one cancellation), after two months I’m making $80, after 12 months I’m making $480 per month. After two years I’m making about $1,000 per month, all by selling only two memberships per month. That’s easy! You can see how memberships snowball quickly.

Advertising

There are two common types of advertising. Pay-per-click (PPC) advertising and sponsorship advertising.

PPC advertising is easy to set up. You can use a program like Google AdSense, sign up for free, and place advertisements on your website. Any time a website visitor clicks that specific advertisement, you earn a commission. The commission varies depending on your niche and the quality of your website. In my experience, you can expect to earn a commission of $0.50 to $1.50 per click.

Sponsorship advertising means a company pays for an advertising spot on your website or podcast. For example, I once charged a flat rate of $500 per month for a company to display a banner advertisement on my website homepage. Advertising is my least favorite of the online business revenue streams. I see far too many entrepreneurs start with advertising, expecting to quit their day job within a few months of using Google AdSense. It is possible to make substantial revenue from advertising, but it takes time and volume. You need a lot of traffic for this revenue stream to be profitable. At $1.50 per advertisement click, you need around 3,300 people clicking on your advertisements every month to make $5,000. For sponsorship advertising, you likely will not garner attention from sponsors until you have tens of thousands of website visits per month. Having said that, sponsorship advertising can be very profitable. At the time of writing, it is common to see fees of more than $2,500 for a 60-second podcast advertisement, if there are enough listeners. The advertising model is profitable if you have the scale and traffic for page views and ad clicks.

Speaking

You can be a public speaker who is paid to speak about a topic you are passionate about or a topic in your area of expertise. Typically, new speakers can charge up to $2,500 per gig, and experienced speakers can charge anywhere from $10,000 to $20,000 for each speaking engagement.

Speaking is a highly profitable business model; if you book just two speaking engagements per month, you can easily generate $5,000 in monthly profit. Much like coaching, it takes a bit of work to make connections, prove your expertise, and book gigs. The bulk of your work will involve proving your expertise on a given topic and then connecting with the appropriate host for conferences and events. The only downside is the number of available events within your niche. There may be too few opportunities and too many competing voices to book a full-time schedule of speaking engagements. In that case, speaking is an excellent high-margin supplementary product to upsell, on top of your books, courses, and memberships.

I highly recommend Kent Julian’s Paid to Speak Conference if you are considering speaking as your primary eCommerce revenue model.

Print-on-Demand

Print-on-demand is a program that prints your products and ships them directly to your customers after the order is placed. For example, if you create a t-shirt design, a print-on-demand company will print your design on a t-shirt and ship it to your customers. This means you don’t hold any inventory. The customer places an order through Amazon or your online store, and your print-on-demand company prints the product and ships it directly to the customer. You pay a small fee for the printing and shipping, and the rest is profit. For example, if you are selling a t-shirt, you pay $10 for the t-shirt and printing, but you earn a $5.00 in profit on the $15 that the customer is charged.

The biggest benefit to the print-on-demand revenue model is you don’t hold inventory and you only pay when a sale is made. There is no upfront cost, other than hiring a graphic designer if needed.  With this online business revenue stream, your print-on-demand company will do everything for you. You just need to create the product. They will conduct all transactions, print your products, and ship it to your customers.

I use TeeLaunch for my print-on-demand products. They have a ton of print-on-demand products including t-shirts, sweatshirts, socks, hats, backpacks, totes, coffee mugs, canvases, blankets, dog bowls, and so much more. The whole program is run through Shopify, which makes it remarkably simple to use. You can sync your products with Amazon and your website with just a couple of clicks. That means all you need to do is upload a graphic design and drive traffic to the product; TeeLaunch will do the rest.

More about print-on-demand, and how to make money with this eCommerce revenue model, in my blog 25 Niche Site Ideas (and how to make money with each)

Dropshipping

Dropshipping is an eCommerce business model in which you sell a physical product without holding any inventory. You are essentially a broker. You work with a supplier or manufacturer to sell its products through your store. When you make a sale, your supplier ships the products from its warehouse straight to the customer. The supplier charges you a flat rate for the product and shipping, and you charge the customer a higher price that includes your set profit margin. For example, I use dropshipping to sell dog toys through my online store. I charge $20 for a rubber dog toy; the supplier charges me $10 for the toy and shipping. When I make a sale, the customer pays me $20, and I pay the supplier $10. I make a $10 profit, and the toy is sent directly to my customer from the supplier.

Dropshipping is a bit like a retail store that sells a product from a manufacturer or supplier to the end consumer. The only difference from a retail store is the product I sell is white labeled, which means it looks like I own and manufacture it and only my store sells it.

Dropshipping is becoming an outdated and saturated business model. I use it only as a supplementary revenue stream; it is never my primary source of revenue. Customers care a lot about the value and differentiation of your business. When you dropship a product, you work with a manufacturer that sells the exact same product through dozens, hundreds, or even thousands of other online stores that engage in dropshipping. A customer could theoretically buy the exact same dog toy that I sell from a different online store using the same supplier. For this reason, it is hard to differentiate your website from other dropshipping websites; everyone is selling the same product.

More about dropshipping, and how to make money with this eCommerce revenue model, in my blog How to Make Money Online Without Paying Anything.

Software-as-a-Service

Examples of software-as-a-service (or SaaS) include DropBox and Salesforce. The software itself is the product, often sold as a membership plan directly to consumers or to businesses.

This is one of the most complex business models you can choose, so I do not recommend starting with a SaaS product for your first business. SaaS requires advanced coding, server space, and upkeep, all of which is hard to accomplish without startup capital and investors. The SaaS eCommerce revenue model can be highly profitable if done right, but it is too complex for your first business. Save this business model for one of your next businesses.

Mobile App

Similar to SaaS products, building a mobile app is a difficult business model to start with. Mobile apps are low-value revenue drivers. Apps are typically monetized with PPC advertising, monthly memberships, or sold as a premium app generating $1.00 to $5.00 profit per sale. A lot of work and money goes into coding the app and updating it when phone software changes, and there is little payoff for all that hard work (trust me, I’ve tried).

Mobile apps are great as a supplementary product, something you can consider adding to your business in the future. They can be incredibly profitable when launched in an existing market, when you already have thousands of interested customers ready to download your app. But don’t start with a mobile app as your first eCommerce revenue model. You can consider launching a premium app (with a membership feature) as a secondary product only after you build up an audience.

Amazon FBA

Amazon FBA is the process of selling physical goods on Amazon through Amazon’s inventory and delivery program. In this process, you work with a manufacturer (most likely in China) to create a product, buy inventory, ship it to Amazon’s warehouses, and sell the products on Amazon. Amazon will fulfill the orders and ship the products to your customers.

I do not recommend starting with this revenue stream. My biggest business failure today came from a failed Amazon FBA business where I lost $16,000. It is a difficult and expensive business model, you will need to invest upfront capital to buy inventory, and your profit margin is reduced by Amazon’s numerous fees. For reference, I paid $10,000 for 500 units of inventory for an Amazon FBA product and struggled to turn a profit. Additionally, it took months to find a viable manufacturer and weeks to understand the logistics of shipping goods from China, through U.S. Customs, to Amazon warehouses. If done properly, this approach can be incredibly profitable, but it is a difficult eCommerce revenue model to start with. Greg Mercer of Jungle Scout runs a Million-Dollar Case Study every year that shows how to launch a profitable Amazon FBA product. If this is one of the online business revenue streams you choose, I recommend following along with the Jungle Scout Case Studies.

Marketplace

If you are selling a physical product or craft, one of the best places to start selling and validating your product is through online marketplaces like Etsy or eBay. They are great ways to introduce your product to the world, quickly get it in front of potential buyers, and start generating revenue.

If you do choose this route, I highly recommend you also start building up your own platform through your own online store with your own following, because marketplaces like Etsy and eBay charge transaction and processing fees that reduce your profit. That being said, a marketplace like Etsy is a viable eCommerce revenue model and great place to start and build up a client base.

Freelance

A freelancer is a person who works as a contractor, offering services to people and businesses for a fee. This is a very broad definition. A freelancer can do video editing, answer emails, design logos, record voiceovers, carry out SEO work, or conduct marketing campaigns. A freelancer can provide pretty much any service for a fee.

There are a number of freelance marketplaces where you can list your services and book clients as a freelancer. The two places I recommend for hiring freelancers are upwork.com and fiverr.com.

Freelance marketplaces are a good place to start, especially if you are offering a service in a competitive niche such as graphic design, video editing, audio management, or social media administration. Once again, I highly recommend building up your own platform through your own online store with your own following, because marketplaces like upwork.com charge fees that reduce your profit. Still, a marketplace like that may be a great place to start generating revenue and build up a client base as you work on your own platform and online store.

More about freelancing, and how to make money with this eCommerce revenue model, in my blog 10 small profitable business ideas.

Retail

You can sell physical products through a retail store. The retailer will purchase products from you and mark them up to sell on their shelves. Instead of selling directly to the consumer, you are selling to the retailer. You will need to consider advertising, labeling, packaging, storage, manufacturing, distribution, pricing, and logistics. All of that can be outsourced, for a fee, to any number of different third-party services. With this business model, the profit margin is smaller, since you need to consider all the expenses of manufacturing and distribution, but this can help with volume to get your product in front of an audience quickly.

Service-Based Offerings

When I say service-based, I mean trading your time to provide a service in return for payment. This is a broad type of offering. Think landscaping, home repair, and cleaning services. Meaning, you need to physically show up at a location and perform a service to be paid. Eventually, you can scale your service business and hire employees to do the work for you, but typically this type of business starts with you doing the heavy lifting, trading hours in your day for revenue.

This is a viable business model; thousands of service-based businesses are started every day. You could start a lawn care service business right now and go door to door booking new clients at $50 per hour. This type of business is easy to start and easy to monetize. The downside is trading your time for money. If possible, I recommend choosing a passive income stream like online courses or memberships instead of a service-based business.

Brick and Mortar

Brick-and-mortar businesses encompass a wide range of offerings. This includes restaurants, retail stores, insurance agencies, and a variety of franchises. You can start your business as a brick-and-mortar business to attract foot traffic, but this is much more complex and expensive than an online business. With this business model, you will need to consider rent, utilities, insurance, marketing, and overhead. These add up quickly, and every expense reduces your profit margin. Remember, I recommend starting online to validate your idea and work the bugs out of your business before considering the move to a brick-and-mortar location.

Social Media Influencer

If you are just starting, and just learning how to make money with eCommerce, I recommend you avoid social media as your primary revenue stream. It is hard to make money, let alone a living, solely as a social media influencer. Growing a large following on Instagram, Facebook, YouTube, or any social media channel is a great way to grow your brand, but a large following in itself will not make you money.

I see far too many new entrepreneurs start with YouTube, expecting YouTube eCommerce revenue model to support their full-time income. For reference, the average YouTube channel earns about $3.00 per 1,000 video views. That means to make $5,000 per month, you will need a YouTube channel that gets 1.6 million views per month. That is a lot of work for very little payoff; it is extremely difficult to get a million views per month.

To make money as a social media influencer, you need something to sell to your audience; the social media platform in itself will not generate enough revenue to support you. You will notice that the influential people you follow on social media, the ones who seem to be making a living as influencers, are frequently promoting products. These are digital products they created, products they are paid to promote (advertising), or commissioned products (affiliate).

Social media is an effective tool to grow your business and expand your reach, but without millions of followers, the social media platform itself will not generate enough revenue to support you financially. This is one of the hardest eCommerce revenue models to generate substantial business profit.

Estimate Profit

When comparing business ideas, considering how to make money with eCommerce, and determining which product or service is best for you, start by estimating the profit you can generate from each revenue-generating idea.

To determine which idea is best, start with the end profit goal in mind and think through how easy or difficult it would be to meet that goal. For example, say your goal is $5,000 per month in revenue. Now, consider how many sales you would need from each revenue stream to meet that goal.

If I were selling an online course at $200 per course, I would need 25 sales per month to generate $5,000 in revenue. That is doable.

If I were selling a group coaching program at $500 per seat, I would need 10 sales per month to generate $5,000 in revenue. The problem is that group coaching is not a passive revenue-generating method. I would need to invest a lot of time—trading my time for money—to sit down and conduct these group coaching calls month in and month out. Ten group coaching sales per month is doable, but you will need to consider how much work it will involve to run a new group coaching program every single month.

If I were to implement an affiliate revenue stream and generate $50 in commission per sale, I would need 100 sales per month to generate $5,000 in monthly revenue.

If I were to start a membership program charging $20 per month per member, I would need a total of 250 members to generate $5,000 in monthly revenue. Membership programs are very lucrative but can be slow to scale. In this case, if my goal were to reach 250 members and thus $5,000 per month in my first year of business, I would need to add around 21 new members per month, without losing any members.

If I were to generate revenue through Google AdSense, assuming I made $1.00 each time someone clicked on my advertisement, I would need 5,000 clicks every month to make $5,000. Assuming that 1% of my website visitors clicked on my advertisements, I would need 500,000 people a month visiting my website. That is very difficult to achieve, which is why I am not a fan of the advertising revenue model as a sole source of income. Advertisements can also clog up your website and distract website visitors from your value proposition. PPC advertising only works if you have scale and generate a lot of traffic on your website.

When choosing a revenue stream, think first about your business and your revenue goals. Work backward from there and consider how many sales you will need per month from each revenue stream to meet your revenue goal. The specifics of this analysis will change depending on your niche. For example, I can envision the possibility of selling a $5,000 coaching package in the entrepreneurship niche, a package that teaches a client how to build a profitable business over the course of 10 coaching sessions. However, I cannot envision the possibility of selling a $5,000 coaching package in the bonsai tree niche, but I can envision myself selling 50 bonsai tree online courses at $100 each. Consider each of your business ideas and work backward to estimate how many sales you will need to generate $5,000 per month in income.

My Strategy (my use of online business revenue streams)

I use a mix of revenue-generating strategies. I implement multiple online business revenue streams in every one of my businesses. To turn a profit as soon as possible, when I first start a new online business, I start with affiliate marketing. I find one or two lucrative affiliate partners, ones I know and trust, and begin recommending their products to my audience. This is an easy way to begin generating revenue that does not require much work. It takes less than five minutes to research and sign up with an affiliate partner. Then, all you need to do is get your unique affiliate URL from the affiliate partner and begin recommending the products to your audience and website visitors. If someone clicks your link and purchases the product from your affiliate partner, you earn a commission. You do not need to put in the work of building a product or service; you simply recommend someone else’s product, a product that has already been tested and proven. This is an easy way to begin generating revenue from your website.

In addition to the affiliate revenue stream, I sell at least one high-value product that I own and control in each of my businesses, whether that means coaching, online courses, or memberships. I sell something I own, that I can charge a premium for. I charge more than $400 for my online courses, I charge more than $500 for each coaching session, and I charge at least $40 per month for my membership programs. This is how you quickly scale your business and meet that goal of $5,000 per month. This is harder and more time-consuming to pursue, but it is much more lucrative than the other avenues, as you keep 100% of the profit you generate from the products you own. You will need to spend a few months building out your course, writing your book, or creating your membership program. It is more work, you need to put in the work upfront, but selling your own product is vital to the success and profitability of your business.

I highly recommend you sell your own product, something that you personally create and own. Affiliate partnerships and advertising relationships can change without any input from you. Your affiliate partner could cut its commission or choose to stop its affiliate program altogether. This could erase your revenue stream overnight. This happened to me when the Amazon affiliate program cut its commission for pet products from 8% to 3%. That revenue stream was cut in half overnight. Fortunately, I had other online business revenue streams with my membership program and books that kept my business turning a profit, but other online businesses were not as lucky. A number of businesses that relied solely on the Amazon Affiliates program lost their livelihood overnight. That is why I recommend you build and sell something you own, a product or service that you control and sell through your own website.

This is my process; this is what I recommend to new entrepreneurs. Use an affiliate revenue stream to begin generating revenue quickly and easily and mix in your own high-value product or service—a digital product, coaching, online courses, or a membership program—to bolster your revenue.

My Online Business Revenue Streams

For reference, I am a huge fan of digital products, especially online courses. Here is a breakdown of how I am making money from my businesses:

• Online course: I generate more than $5,000 per month selling online courses; this is my biggest revenue stream. My courses are priced between $200 to $400 each, and I sell between 15 and 20 courses per month.
• Coaching and group coaching: I charge $500 to $1,000 per client, on average, and book roughly one client per month.
• Print book: The print version of my dog training book sells for $19.99 on Amazon. I make a profit of around $8.00 per sale (after Amazon fees). I sell 40 to 60 books per month for a profit of around $300 to $500 per month.
• Audiobook: The audio version of my dog training book is sold through Amazon’s Audible program. I make a profit of around $4.15 per sale (after Audible fees). I sell 30 to 50 audiobooks per month for a profit of around $120 to $200 per month.
• eBook: The eBook version of my dog training book sells for $9.99 on Amazon. I make a profit of $6.67 per sale (after Amazon fees). I sell 10 to 20 eBooks per month for a profit of around $70 to $130 per month.
• Membership: I have a membership platform for my dog website. I have a few members paying monthly and some paying annually. My memberships range from $20 to $40 per month, and I typically have 30 to 50 members at a given time. It is a very niche membership program; I expect it to scale over 100 members by the end of the year, but it’s a slow build. That being said, with 30 to 50 members each paying $20 to $40, this little membership program brings in $1,000 per month in recurring revenue.
• Affiliate: I have a wide range of affiliate programs for each niche business I own. Some of these affiliate programs have very low margins (3% per sale on Amazon), while others are high margin and recurring ($20 per month). This is supplementary to my other products. Typically, I can expect around $100 to $200 from Amazon Affiliate sales per month, around $200 from a dog training affiliate per month, and another $200 monthly from entrepreneur affiliate programs.
• Selling marketing: I am just beginning to experiment with selling marketing space on my websites. I receive a few emails per week from brand managers looking to bolster their marketing reach, so I have started selling blog space on my dog website. I charge $25 to link to their website and provide exposure and $75 for a full guest blog post. So far, this is bringing in around $200 per month.

You can see how I am using multiple online business revenue streams here, combining digital products, coaching, and affiliate programs to average revenue of more than $7,000 per month. You can see that the bulk of my revenue comes from selling online courses and coaching. I have supplemental revenue streams with memberships, books, marketing, and affiliate programs that help my bottom line. You can see here how prioritizing a high-value product (online courses selling for $400 each) is an easy way to hit high-profit margins fast. It’s a lot harder to reach $7,000 in revenue with Amazon affiliates, at around $2 commission per sale. That is why I recommend digital products like courses, guides, memberships, and coaching as your priority product, supplemented by affiliate and other online business revenue streams.

You can follow along with my progress with my quarterly blog income reports here.

Summary – Online Business Revenue Streams (How To Make Money With Ecommerce Revenue Models)

It’s almost time to choose your one business idea. In this blog, I showed you eighteen viable strategies on how to make money with the eCommerce revenue model. Now it’s your turn to think through these revenue-generating methods and choose one online business revenue stream for your business idea.

Determine how you will make money by choosing one of these online business revenue streams and estimate the profit potential of each business idea. Review the 18 revenue models described in this section of the mini-series and choose one primary method that you will use to generate revenue. Consider your target market, consider the pain point faced by your target market, and brainstorm a product or service that you could sell to solve the challenges faced by your target market.

Look at your three final business ideas, the ones you selected in Part Three of the mini-series, and compare the three business ideas to one another to determine which offers the best opportunity for profit.

Continue The Online Business Idea Mini-Series

Continue with the online business idea mini-series. Continue on to the next section of the mini-series below:

• Part 1: What Type of Business Should I Start (Why You Should Be Starting an Online Business)
• Part 2: I Want to Start a Business, But Have No Ideas (Business Idea Generator Exercise)
• Part 3: I Have a Business Idea. Now What? – How To Test Your Business Idea (With Long Tail Pro)
• Part 4: Online Business Revenue Streams – How to Make Money with Ecommerce Revenue Models
• Part 5: Validate and Choose the Best Online Business Idea (Your Most Profitable Business Idea)
• Part 6: Next Steps -How to Build an Online Business (The Steps for Starting a Profitable Online Business)
• Step One: The Surprisingly Simple Process To Research, Validate, And Choose The Perfect Online Business Idea (access the full book here)

Ready to Start Your Business?

If you find yourself saying “I want to start a business, but I don’t know what to do,” this is the book for you. In Step One you will research, validate, and choose the perfect online business idea. By the end of this book, you will come away with a business idea list, one validated business idea, and a plan to launch your first business.

Step One is all about taking action. With this book, you will come up with over one hundred and fifty business ideas, you will conduct market research to narrow your list of ideas down to one viable idea, and you will validate the idea so you can hit the ground running and launch your business.

Ready to start your business? Pick up your copy of Step One today, and get started today. By the end of this book, you will come away with the perfect idea–and plan–to launch your online business.