Why Your Web App Needs Multiple Revenue Streams

    By Lucas Olmedo | Small Business

    Why Your Web App Needs Multiple Revenue Streams image B2C Fligoo 300x218Why Your Web App Needs Multiple Revenue Streams

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    New web startups pop up everyday, but many don’t survive the first year.  When the investment runs dry, many startups need to find a way to be profitable, but setting up a revenue stream solely based on selling ad space isn’t always enough. Relying simply on ads doesn’t cut it anymore, especially since users are becoming annoyed with them more and more. Nowadays, multiple revenue streams are a must for web app builders. So how can your startup create an additional revenue stream that doesn’t involve ads?

    One of the best examples of a website that did this right is Pinterest. Instead of ads, Pinterest started out by redirecting its users to the link below the image, or product link, but only after bouncing the user past another server first. This redirect happens so quickly that the users don’t even realize it. So why did Pinterest do this? It turns out they were using a service called SkimLinks to turn plain product links into ones that generated money. If someone purchased a product via a Pinterest-modified link, the social network would get a small cut. Even if nothing was purchased, this data allowed Pinterest to collect powerful data about those who just clicked.

    Why Your Web App Needs Multiple Revenue Streams image B2C Fligoo1 300x191Why Your Web App Needs Multiple Revenue Streams

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    This revenue model doesn’t just work with Pinterest. Finding a way to make revenue behind-the-scenes, for example referring users to a retailer or specific product page, is a new way for web apps to make money as selling ad space is decreasing in popularity.

    Affiliate links are a great option for web startups looking to generate an additional source of income. Affiliate links work by linking the products on your website to online stores and as the referrer, you earn a cut of every successful sale. This concept is nothing new, Amazon and eBay have been running affiliate programs for 10+ years now. Services like SkimLinks are just taking this idea a step further and making it easier for businesses to leverage multiple affiliate programs from Amazon, eBay, and smaller retailers, all at once with much less effort. If you choose to do affiliate marketing with links, just be sure to be upfront with your visitors about what type of data your app is collecting.

    When creating an app, the easiest choice is to rely on ads only. However, by focusing on just one way to make money, you are missing opportunities to implement additional money-making functions. By establishing an additional revenue stream outside of traditional ads you can drive revenue to your site. Whether it’s through affiliate marketing or offering premium subscriptions, it’s important to remember every developer and application has different needs. What may work for some might not work for everyone. We recommend testing the different revenue options and seeing which works best for your business but always testing more than one!

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