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Diversify Your Income Streams: The Nexus Tax and Bloggers

Yesterday, I received an email from one of the companies that I am an affiliate with that should have a lot of bloggers incredibly nervous.

With the impending passing of the California Budget which includes an Affiliate Nexus provision we have begun the process of removing all publishers located in the State of California.  From what we understand the Governor needs to sign the bill by July 1st and that when he does it will become effective immediately, if the Governor does not sign the bill all publishers will be reinstated to our program.

This is not something new. North Carolina and Illinois have also passed similar laws that allow for taxes to negate the money that companies use to pay affiliates. As a result, companies like Amazon.com have pulled their affiliate programs from these states because those programs are no longer profitable for the company and the bloggers.

For the bloggers that were depending on these commissions to support the bulk of their income stream, they are now without cash!

Diversifying Income Streams For Long Lasting Growth

I think I have probably told this to every blogger I run into and mentioned it in every presentation I have ever done…if you want to be successful over the long haul, you have to diversify your income streams. Business changes from day to day. What was great today could be gone tomorrow.

You have to ask yourself one simple question. If my #1 source of income was gone tomorrow…what would I have left?

If you answer is nothing, you are in a lot of trouble as a law like this…or some companies choice to leave the market completely…could leave you broke and penniless.

Successful companies are successful because they continue to grow and expand. As market conditions change, the economy does its thing and people’s tastes adapt to times, there are going to be periods in which certain areas that generate income for your business are up and down. When you diversify into multiple, related areas, you are able to handle the swings. When one is down, another one may be up. If one goes away completely, you are able to make up the difference in other areas instead of starting back from square one.

As a blogger, you have a lot of areas outside of just affiliate revenue that you can diversify into to keep your ability to go the distance healthy.

  1. Make Your Own Products and Services (eBooks, consulting, membership sites, physical products)
  2. Sell Direct Advertising
  3. Pay Per Click and Pay Per Impression Advertising (Adsense, Contextual, etc)

By jumping into different income options and expanding your offerings, you are taking the steps to insure that your blog is always generating income. Perhaps the best and longest lasting of these would be to create your own products and services that not only make you money…but strengthen your brand name at the same time.

Not Every Income Stream Is Right For You

Now…with this said. Not all of these areas will work for your blog. Just because you want to diversify, that does not mean to keep things going that do not work. In some markets, PPC/PPM advertising payouts are horrible and not worth the screen real estate. Choose what you implement carefully and test how they perform on your blog before deciding whether or not it is worth the effort and space.

And…like most things in life…this too can change so you have to be willing to test out income producing assets of your blog even if they might not have worked well in the past. With new knowledge and new market conditions, they could be a viable option now when they weren’t before.

Do Your Market Research

What is working for your competition? Is that an option for you? What are they not doing that might work in your market that you could capitialize on and set the bar?

These are all questions you should be asking yourself as you look for unique ways to produce income. While it is always good to look at what your competition is doing to make money on their own websites, sometimes it is even better to try what they are not doing as you might have found a hidden gem in your industry. It is always a good idea to keep tabs on the people around you for ideas.

How I Diversify On My Blogs

All of this theory is great, but how do we implement it in practice. On Bike198.com, I diversify my income streams with the following assets:

  1. Direct Advertising
  2. Sale of Review Products
  3. Affiliate Advertising
  4. CPC Advertising (2 banners)
  5. My Own Products (Ramped Riding eBook, 29er T-Shirt, Riding Kits)

As you can see, there is a lot to pull from to generate income. All of these avenues produce consistently month over month.

How do you diversify your income streams on your blog?

12 thoughts on “Diversify Your Income Streams: The Nexus Tax and Bloggers

  • DJ Wetzel

    I do contextual ads, affiliate products sales, and I have recently added a job board to my site that has begun to produce revenue. I blog in the “freelance writing” genre, so there are always opportunities for writers to buy helpful services or to find jobs using the job board. I am looking soon to create a few of my own products and begin selling those also. 

    • Robb Sutton

      Sounds like you have a lot running! Great job.

  • Angie Newton

    Definitely don’t put all your eggs in one basket.  I got my last Amazon payment this week (I’m in IL and they booted us) and I have been looking for new options. I monetize my sites in a variety of ways and thankfully there are other options out there.  I definitely need to add my own products to my list though.  It’s good that I can use affiliate programs of the companies in my state though (like Barnes and Noble and PetSmart for example for various niche sites).  Just gotta look around to find more replacements. The thing that stinks is that I couldn’t possibly use a redirect for every product, well, I guess I could have but I now have all those old links to switch up.  Should be fun!

    • Robb Sutton

      Do you use MaxBlogPress’s Ninja Affiliate Plugin? (http://robbsutton.com/affiliateninja) It makes life much easier when that happens. I had an online retailer drop their affiliate program completely once and it made switching links a 20 minute process instead of days across 100’s of posts.

  • Frank Dickinson

    Great post Robb! I was one of those affiliates that got hit hard when Amazon pulled out of paying affiliates here in Illinois.

    Since then I have been instituting many of the different income streams you talk about in the post..
    Don’t want to be caught unaware again.

    • Robb Sutton

      I feel for you Frank! That is a BS law that they aren’t even getting the tax dollars anyway because the companies are pulling the programs. Great job on finding alternative sources.

  • Annie Sisk

    Well it may not be new but it’s news to me. I’ve never made any significant money from Amazon Associates links, but was planning to do more assertive marketing of all my affiliate programs. I moved to NC a year and a half ago. Haven’t heard one word from Amazon about this. I’m still accruing commissions (a few cents a month, truly nothing spectacular) but now I guess I might as well just yank the links altogether. Since it was never a significant income stream for me to begin with, I haven’t really lost anything.  I’ll crank up the ebook production rate and maybe press some “commodity” type services a bit more assertively. I feel worse for the folks whose AA streams were significant.

    • Robb Sutton

      What is your home address listed as in Amazon Associates? Did you change that with the move?

      • Annie Sisk

        Yeah, I think that’s the hole in their system, and I must have fallen through . Changed all my AMZN addresses as soon as I moved last January, so if it were a question of timing, you’d think they would have caught on by now. 

  • Keith Bloemendaal

    I live in NC and have never been able to use Amazon, so this hasn’t affected me in the slightest, it does anger me though because I would love to be able to use Amazon on a few of my niche sites and I can’t seem to understand why at this time would states knowingly take income (which creates income TAX you retards!) away from hard working people…. 

    • Robb Sutton

      Because they have never worked in the private market. In CA, they increased taxes and actually decreased tax revenue.

  • Nigel Fisherman

    Researching for market is really a big help. Why? It’s because you need to know more about your business. How its status is going. And competitive it is in the market. 

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