Expanding Your Online Business
An obvious choice is to add products or services to your existing business site. The purpose is to use variety to attract a wider customer base while bringing in larger revenues. This strategy is certainly the one that many entrepreneurs implement regularly, whether they realize it or not.
After you consciously identify it as your preferred growth strategy, you can become more aggressive and targeted with your actions.
Here are the pros of expanding your business:
You retain full control of the business, just like always.
You can explore different areas, which can be fun for an entrepreneur.
The cons of expanding your business are that they
Can take more time to show results
Might require a large investment in back-end systems to support added inventory or a product base
Acquiring other sites
Buying existing sites is another fairly typical development strategy. You can easily start by making a list of competitors’ sites that might be worth purchasing. Also look at sites that complement your current business. These noncompeting sites offer products or services that are different yet still a good fit.
Of course, the larger or more established a site, the higher its asking price. Sometimes, a better strategy is to identify up-and-coming sites or sites that (like yours) have also remained small.
The pros of acquiring other sites are that they
Provide a quick way to expand or diversify
Introduce your current site to a wider customer base
The cons of acquiring other sites are that they
Usually require substantial out-of-pocket cash
Sometimes aren’t for sale, so it takes time to convince their owners to negotiate a price
Becoming an affiliate or a partner
Maybe you’re not ready to purchase another company outright. A better solution might be to expand through partnering opportunities or affiliate programs. For example, you might partner with a national membership-based organization as the sole provider of a particular service or product.
Expanding your business through partnership agreements is a good idea. You’re typically unrestricted in the number of partners you have, and you retain control — and can cancel an agreement if the partnership doesn’t work.
In a similar arrangement, starting your own affiliate program becomes a viable option. Unlike in a partnership, you’re developing a specific program that another site can replicate in exchange for a commission.
Although an affiliate program is often associated with e-books and other content products, it’s a viable delivery method for almost any product or service. You even see traditional e-commerce stores offering a flat percentage of revenues to affiliate sites that sell their products by using links.
Or you might see payroll services companies that create affiliate opportunities. In that case, the affiliate earns a flat dollar amount for every customer referral that comes through the site.
To make affiliate programs attractive (and worthwhile) for others to participate in, you should have a viable product to promote and pay a decent commission.
The pros of going the affiliate or partner route are that they
Are relatively easy to set up
Are inexpensive to develop
Are compatible with almost any type of business (whether it’s product-, content-, or service-oriented)
Can produce a quick return on sales
Here are the cons of going the affiliate or partner route:
Brand control becomes an issue (primarily with affiliates), as you lend your name for others to use.
Administrative duties increase (monitoring affiliate sales, cutting checks, and distributing 1099 forms, for example).
You’re essentially marketing two companies now (your original concept and your affiliate or partner program).