We are half way through 2012 now. It reminds me how quickly time flies so I’ll take a step back and re-evaluate where I’m going.
One of the goals I had at the beginning of the year was for passive income. I had a target of $2000 to make in the first half of this year. Did I make it? Read on.
Passive income, as defined in books like the Four Hour Work Week (affiliate link), is where you make money in your sleep. There are a number of ways to do this including:
- Selling your own products
- Affiliate sales (selling other peoples’ products from your website and receiving a commission)
- Advertising on websites
I’ve always been a huge fan of Pat Flynn’s monthly income reports and, although it’s important to stress that passive income accounts for a very small part of my business, I really love the transparency in Pat’s blog and I like to be as open and honest about my business as possible.
Sales of my products
There are two main products that I sell:
- How To Get Clients which was published on July 19th, 2011
- Running a Web Design Business which was published on February 28th, 2012
Here are the sales from my products for the 6 months to June 30th 2012:
|Running a Web Design Business||$976.22|
|How To Get Clients||$174.07|
As you can see, most of the sales came from my new e-book, Running a Web Design Business. I’m currently re-writing How To Get Clients and plan to re-launch it soon. If you’ve already purchased a copy of How To Get Clients, don’t worry, you’ll receive the updated version as soon as it’s published.
Affiliate commissions I’ve received
Affiliate commissions are received when someone buys a product from another website having arrived there from here. So when I write blog posts about developing websites with Genesis, I’ll usually include an affiliate link to the Studiopress site where you can download the theme framework.
I always promote products I’ve used myself (either I’ve bought myself or used through a client). This article, and especially the table below, has affiliate links to products.
Affiliate commissions are hellishly difficult to calculate. Every product has a different scheme and payment structure. It’s difficult to know which payments to include the the last six month period. Do you add the payment when the sale is made, when it goes through, or when you receive payment?
Anyway, this will give you some idea of my earnings from affiliate commissions.
|Genesis WordPress theme||$425.05|
|WPML WordPress Multi-Lingual plugin||$247|
|VPS.net VPS hosting||$340|
|A2 VPS hosting||$170|
|Liquidweb VPS hosting||$100|
|Bluehost shared hosting||$325|
|GoDaddy domain name registration||$80.78|
|E-Junkie shopping cart system||$14.40|
|Aweber email marketing and delivery||$63.30|
It’s very hard to quantify affiliate sales reliably, for example, I haven’t included my commissions from Hostgator or Dreamhost which are taken away from my hosting expenses and may account for another few hundred dollars.
Overall, I’m astounded that I made over $2000 in half a year on affiliate commissions!
It’s very difficult to make any money from advertising on a blog. As you may or may not have noticed, I have just started running ads in my sidebar from Influads.
I have only just put the bigger size of ad on the sidebar. The smaller size only made $40. Unless there’s a dramatic improvement, I’ll give up on ads for the time being.
What does this all mean?
My product sales plus affiliate commissions equal $3331.07 over the last 6 months. Well over my $2000 target.
Although this is only a small part of my business, it’s something that really interests me and I’ve learned a lot from quantifying it.
The most important point is that my affiliate commissions are twice as much as my income from my own products! This is a real eye-opener. Especially when you consider creating your own products is a million times more time consuming that adding in a few affiliate links!
However, passive income for this company is a side experiment and I wish to continue with my own products as much as the affiliate side.
What’s important is that I only ever include an affiliate link to a product when it occurs naturally in my blog. I also try not to “peddle” my own products unnecessarily.
It’s important to keep the passive side of my business ticking over without overdoing it. Remember, most of my business is actively working for my wonderful clients!
What do you think?
What you think of the affiliate links, products (if you’ve noticed them) and advertising on this site? Maybe you think it’s too dodgy and I push the affiliate stuff too much? Or maybe I’m peddling my wares (e-books) too openly? Or, you don’t like the ads?
I’d love to know.
What you can do
Do you mention any commercial product in your website that you really believe in? If so, just go to Google and search for “the product name” plus “affiliate” and see if they have a scheme. I bet they do. It may take only 5 minutes to set up the link but it could make you a bit of money in the long run!