Build a website for profit and fun, and one of the first things you’ll learn is that it pays to diversify your revenue streams. You’ll want ads that pay per click, banners that pay for impressions and affiliate links that give you commissions. Together, those multiple sources let publishers get the most out of all their users and create a stable income.
Exactly the same is true of a photography business – even one that’s similarly part-time, operated from home and intended to provide no more than supplementary cash to subsidize an expensive hobby.
The more ways you can use your photography to generate revenue, the higher that revenue is likely to be and the more you’ll be able to rely on it to cover your expenses.
Josh McCulloch, for example, a professional photographer who specializes in outdoor photography, uses his website to sell his services in multiple ways. His portfolio encourages commissions, his stock images give him royalties, his fine art prints give him high-value sales, and his postcards let him pitch to low-budget buyers.
The result is a business that can still make money even if one of aspect of the market changes — and even if not all of those streams have equal value.
“No question commissioned work provides the most revenue, and is the most profitable,” he told us. “With the relatively recent plunge in stock pricing, it’s a toss-up between that and my new card series for the number two spot. Prints are a distant last place and only make up about 5 percent of my revenue.”
The relatively low value of prints to Josh’s business though doesn’t necessarily mean that he should drop them. As long as they’re still profitable — and he’s not putting more than 5 percent of his efforts into marketing and managing them – his print sales are still a valuable addition to his business.
But it’s not just the incomes that mark the differences between the different revenue streams. It’s also the effort and the type of work that goes into maintaining them, and of course, the types of income they generate.
Selling stock, for example, requires an initial investment of time. You’ll need to have already built up a large enough supply of images to generate sales and you’ll have to market them too. Josh has a carefully-categorized stock library on his website but he also sells through a number of other outlets, including Firstlight (Toronto), All Canada Photos (Victoria), The Photoshelter Collection, Digital Railroad’s Marketplace, and Alamy (UK). Again, that’s a good example of diversifying within one income stream. But as Josh points out, stock prices are now falling and for photographers looking to enter through microstock in particular, the photos need to be constantly updated and refreshed to keep the revenues flowing.
The stock images might once have been a reliable source of income but they’re now relatively risky and require some effort to maintain.
Balancing Risk and Reward
Josh’s prints, on the other hand, begin at $95 and draw on the same library of photos that he built for his stock portfolio. That might give him larger profits on each sale but he makes far fewer sales overall. Because the prints are the same as the images offered in his stock library and because the printing and packing are handled by Photoshelter though, there is very little extra effort involved.
Josh’s main goal though is always going to be to bring in more commissions, and most of his work comes in either by word-of-mouth or through optimizing his website for search engines. Again, these are going to be much rarer than stock and postcard sales – even if they are more profitable overall. In terms of the effort required to market them then, commissions can be thought of as a high-risk but high-reward product.
Ultimately, it’s that balance between risk and reward – or effort and income – that any business has to maintain between its different revenue streams. While there might be one stream that brings in occasional large sums, there should also be other streams that deliver regular smaller sums too.
It is noticeable though that Josh is always on the lookout for new streams and in postcards he seems to have found one more way to bring in small but frequent payments.
Of course, photography rewards in more than one way and there is one more thing you need to consider when looking to create a balanced business: the pleasure you get out of each stream. If you’re putting most of your effort into creating images that you don’t enjoy shooting – even if they make money – that’s a pretty good sign that you’ve got the balance wrong.