Internet Marketing: Too Many Eggs in One Basket?

While it’s important not to spread oneself thin and try to work on too many projects at once, it’s also important to develop multiple streams of income. One has to find a proper balance between the two. Generating multiple streams of income is not just a wealth-generation strategy, it is also a matter of increased […]

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While it’s important not to spread oneself thin and try to work on too many projects at once, it’s also important to develop multiple streams of income. One has to find a proper balance between the two. Generating multiple streams of income is not just a wealth-generation strategy, it is also a matter of increased financial security.

Consider these very real online examples of what can occur when one has too many eggs in one basket:

  1. You are earning a majority of your income from Amazon, when suddenly new tax laws incite Amazon to ban all affiliates from a certain state, which just happens to be your state.
  2. You earn a majority of your income from one website, which receives a majority of its traffic from Google search results. The website does not receive a high enough percentage of its traffic from other sources, such as referring websites, affiliates, or loyal repeat visitors. One day, Google makes a major algorithm shift, and, right or wrong, your website drops in its rankings, causing it to loose 75% of its traffic and income.
  3. You are a freelancer and earn a majority of your income from one client. One day, your client suddenly decides to go out of business and cancels your contract with no prior notice.
  4. You earn a majority of your income from an Adwords campaign you are running. Suddenly, Google changes the rules, discontinues your campaign, or raises your cost per click to the point where your campaign is no longer profitable. Goodbye to that stream of income.
  5. You earn a majority of your income from Adsense revenue, and one day, whether for correct reasons or not, your Adsense account gets canceled.
  6. A large portion of your income comes from a site that sells small but unnecessary luxury items. A recession hits, people clamp down on frivolous expenses, and your sales plummet.

These are examples, and I imagine you could think of more. This is not to scare you, but to help prepare you – to help you remember that an internet marketer or an entrepreneur who puts too many eggs in one basket is putting himself at a certain degree of risk.

If you remain aware of that, as you build your business, you can proof yourself against future catastrophe in the event that the unforeseeable should occur.

Each of the above examples is real – I have either seen it happen to others, or it has happened to me. But in no case did it occur that I lost one stream of income, when it was my only stream of income.

When you work independently, online or otherwise, you have (or can have) increased freedom of movement, you can potentially live and work from wherever you like to live and work, you have no ceiling on your income (though you have to work for it, it is far more expandable than a fixed wage and an occasional raise), and if you do well, you will eventually find that you have many more opportunities available to you than you would if you worked at a 9-5 job.

However, you also have less security than a 9-5 job would give you. Yes, you can be fired from a 9-5 job, but usually with some notice. Not so, in the examples given above – you may or may not have any warning, and what warning you do have may be minimal. I won’t go into details on the ins and outs of unemployment insurance and whatnot, because I think you get the gist.

When you build an online business, remember that you are building a business. Remember that you are an entrepreneur, and that a greater responsibility lies on your shoulders for your income and your future financial security. Build a business model which allows you to receive multiple streams of income.

  • If you are a freelance web developer, remember that having long-term clients is good, but having several long term clients is better.
  • If you are a webmaster and you earn revenue from your websites, have more than one website earning money for you, and don’t rely too heavily on any one source of traffic.
  • Make your websites good enough that people will remember them and come back to them, regardless of your search engine rankings.
  • If you sell products through affiliates, aim to have many affiliates.
  • Look for recession-proof products or services you can sell or promote. Products and services that cater to businesses are always a good idea. Businesses will continue to need and buy services as long as they are in business, providing that that product/service helps them make more money.
  • If you earn revenue through affiliate marketing or advertising, don’t just advertise one product or rely on one ad network for all of your revenue. Test several, so that you can always readjust if something goes wrong with one of them.
  • If you rely on Pay Per Click advertising, have more than one campaign running and successful. And maybe not just with Google, or Yahoo, or whatever it is you are using.
  • If you have multiple streams of income, you won’t have disaster if one drops out or decreases. In fact, you might barely notice.

Also, remember, it’s not just about security. Multiple streams of income = multiple steams of income potential, and allows far more room for expansion.  Just remember to keep things in balance, and make sure you have the time, resources, and/or outsourcing staff you need, in order to keep every project going at an optimum rate.

I hope this is helpful. Feel free to leave feedback on any similar scenarios you have witnessed or can think of; and any suggestions you might have, on how to proof up your business model for greater security – as well as greater potential.

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31 Responses to “Internet Marketing: Too Many Eggs in One Basket?”

  1. Dave Doolin
    January 27, 2010 at 6:49 pm #

    Very, very nice breakdown of the hazards.

    #3 really nailed me last year. It was a good client, but the project ended. Such is life.
    .-= Dave Doolin´s last blog ..MasterMind Power IV: Some MasterMind Examples =-.

  2. Ruth - Web Career Girl
    January 28, 2010 at 8:12 am #

    Very good list – I have also had the same thing with clients and am careful not to rely on one client. But perhaps I’m not so careful when it comes to things like e.g. mainly monetizing through Adsense etc. I’m planning to go for a good mix of sources these days. But just imagine if Good drastically changed things – so many people would lose out!
    .-= Ruth – Web Career Girl´s last blog ..The Role of Fear for Bloggers, Internet Marketers, Self Employed =-.

  3. Irish Tom
    January 29, 2010 at 5:11 pm #

    Hi Anna
    What a wonderful and timely article.
    I am in the process of setting up a new web site (with Holly’s help) and also move in to blogging.
    You have given me some great ideas.
    I was “shafted” about 18 months ago with a “web site package” which promised the earth, moon and stars, but was a total waste of time and cost me over $120 per month to run, and with no return. I eventually cut my losses at the end of 2009 and am starting all over again, but with renewed conviction. This is going to be my year!
    Thanks again for your ideas and for caring about others.
    I hope you have a really wonderful 2010.
    Tom

  4. Anna
    January 29, 2010 at 5:22 pm #

    @ Dave and Web Career Girl – Hi there! Funny that we have all had such similar experiences 🙂

    @Tom – Thank you for your comment Tom, and I am glad you found the post useful! Sounds like you made a good decision, and even better, you decided that you weren’t afraid to go back to square zero and start over. The trick is, not to get too dispersed onto different plans and projects, while at the same time not investing too many eggs in one basket either. It’s all a matter of balance I suppose. I hope to see you here again more, and I’m working on getting back into posting more often again!

  5. Forest
    January 31, 2010 at 6:34 am #

    Hey Anna,

    Thanks for the article. I have been trying to always make sure I have at least two strong sources of cash and tend to balance between client work / site flipping and Passive income.

    I’ll always try and keep a little client work even if my passive gets very large just so I have a fall back.

    Thanks,

    Forest.
    .-= Forest´s last blog ..9 Ideas To Stay At Home On Saturday Night =-.

  6. Jason - Gold
    January 31, 2010 at 10:29 am #

    Ruth – Web Career Girl: I’m guessing a lot of people just shuddered with your last sentence. But it’s good to let people know that. In my opinion, the different “baskets” shouldn’t be in just one source – Like Google. Like what Ruth said, you could have a lot of clients but you’re basically relying on Google. So if they decided to stir up things, you’re toast. And it’s going to happen.

  7. lee@Grow Bonsai
    February 1, 2010 at 5:37 pm #

    I agree very much, multiple sources is the only safe bet, on the other hand the line between being wise and spreading yourself to thin is a very slim one, it is not easy to tread that line
    .-= lee@Grow Bonsai ´s last blog ..Hello world! =-.

  8. Josh Kohlbach@Multiple Streams of Income
    February 2, 2010 at 9:55 pm #

    Anna, I totally get you with this one. Keeping all your eggs in one basket is definitely risky.

    I’m personally aiming to go the next step myself as well and expand my income from just my day job. To do this I’ve started a web design mini business which gives me a small monthly return. It’s small, but it’s something to leverage from.

    I’m leveraging the income I get from that to invest into productizing some of that knowledge. Aiming for a multi-pronged approach. Multiple streams of income gives you that extra security blanket if one of them falls through I guess.

    I don’t know that I agree that a 9-5 job is safer as such – most employers can find a reason to terminate you immediately, however unfair that might be – eg. if the company collapses in a heap.

    Great article.
    .-= Josh Kohlbach@Multiple Streams of Income´s last blog ..Setting Up My Web Design Mini Business [Case Study] =-.

  9. Darren
    February 3, 2010 at 2:48 am #

    I think the best way to accomplish triumph and overcome these hazards is like how I balance my things out and that is keeping everything on a single line and not chasing after too many “too good to be true” methods
    .-= Darren@Free Online Dating´s last blog ..10 Free Online Dating Mistakes To Avoid =-.

  10. Anna
    February 3, 2010 at 10:46 am #

    Hi Josh – Sounds like you and I have a similar business model 🙂

    You may be right on the 9-5 jobs. My experience with such is quite limited. I have mainly worked on a nonprofit basis, a temporary basis (while traveling), or self-employed. Have not done much in the 9-5 arena, come to think of it. At least, not long term! But I have some friends and family who have, and I could see that it was not quite as easy for their employers to just let them off without warning, as it is for a client to cancel a service, or for Google to change an algorithm!

  11. Anna
    February 3, 2010 at 11:11 am #

    @ Forest – Definitely a good strategy.

  12. Holly
    February 4, 2010 at 12:59 pm #

    Wow what a great post Anna – once again! It is so important to try to balance things out while trying to create multiple streams of revenue. A major source of my income (affiliate income for a niche) was suddenly lost about four months ago. The company I am an affiliate for is overseas, and I made them about 90,000 dollars in profit (with my affiliate share in there too). And one day they stopped paying me and stopped tracking commissions and earnings on the backend of the site. I was pretty upset. I contacted the guy and he said the payment processor took the money and his and left. He said he was left to pay out of pocket to fulfill orders that customers made – and get a new payment processor. He said he couldn’t pay me what he owed me. There was nothing I could do in that situation, since he is overseas. Since then, I have been paid once by the new payment processor …it’s been a while..hopefully I will still get paid from that. So, your post is so relevant and a real caution to people to have a few things in order for income…Thanks Anna!
    .-= Holly´s last blog ..Best Blogs to Follow in 2010 =-.

  13. Anna
    February 4, 2010 at 1:11 pm #

    Holly – what a story! That must have been quite a shock. And it really does serve as a great demonstration of what can happen and why you need to be prepared – and take in in stride.

    Yesterday in the gym (where I do all my marketing study via MP3 these days, lol) I was listening to Jack Humphrey and at one point he casually mentioned how his blog (which now gets thousands of visitors a day) was once penalized and banned from the search engines. Needless to say he persisted and got it up and running again. When I heard that, I thought, “wow, it happens to the best of us.” Your story emphasizes that even more!

    Recently with Google Caffeine, one of my sites dropped dramatically in the SERPS (only for Google), while the others did fine or even did better. Ironically, the one that dropped was the one that I put a lot of work into, and the sites that I barely think about did fine! When this happened, I realized how important it is not to rely heavily on one source of traffic or income. If this site had been my main source of income it would have been devastating. As it was, it was more annoying and maybe slightly upsetting, but not the end of the world. Just a learning experience.

    That’s how it should be with business – when things go wrong, we should be able to take it in stride, adjust, and move on. That would be hard to do if you had all your eggs in one basket and could barely survive if one stream of income went bad.

  14. Tim@Mold Remediation
    February 12, 2010 at 4:02 pm #

    Valid points throughout the article. You have managed to point out the main worst case-scenarios. As your title eludes to, follow the old adage, “Don’t put all your eggs in one basket.”

  15. Teena@V8 Supercars
    February 13, 2010 at 9:11 am #

    You made a very good point. I do have several clients, since not all of them are long term, it’s only per project. So I need more than 1 client for me to secure my daily expenses.
    .-= Teena@V8 Supercars´s last blog ..Sydney Seaplanes – Scenic Flight for 2, Sydney Secrets =-.

  16. Nikki@Free Samples
    February 18, 2010 at 8:07 am #

    I definitely agree with you about not putting too many eggs in one basket. I’ve read too many stories of people losing a huge chunk of income after getting banned from adsense or dropping in serps. This is especially bad if they have no other source of income.
    .-= Nikki@Free Samples´s last blog ..Free Sample of Fekkai Hair Care =-.

  17. Cary Bergeron
    February 22, 2010 at 4:19 pm #

    It is super important to diversify. For those who haven’t yet done this it is something to get going on. If the majority of your revenue comes from one channel and that channel dries up bad things will happen.
    .-= Cary Bergeron´s last blog ..Interview: With Ryan At eTycoon.net =-.

  18. A-Kasse
    February 25, 2010 at 12:50 am #

    Hi it is a nice post. The title is good one Internet Marketing: Too Many Eggs in One Basket. There are too many projects on the internet marketing that there is no time to spare. Sometimes these projects are interlinked to each other.

  19. Paul@make money online
    March 2, 2010 at 10:40 am #

    Anna,
    Thanks for the great post. It points out the consequences of having all eggs in one basket and the solutions to that.
    I am just beginning to explore the internet marketing. I have a blog, a fairly new one. I need to know how to increase traffic. Can you give me some tips on how to go about it?

  20. Anna
    March 2, 2010 at 10:43 am #

    @Paul – Post regularly on your blog, comment on others, promote with article marketing and other offsite promotional methods. Plus I highly recommend you get and read these two eBooks (one is free, the other isn’t):

    http://websitesandwebhosting.com/goto/honestriches/
    http://websitesandwebhosting.com/goto/blogprofitsblueprint/

    I probably have written more about this on my blog – feel free to browse the categories and archives. I hope you find something useful!

  21. Anna
    March 2, 2010 at 11:01 am #

    @Teena – Yep, I think it is always best to have a few long-term clients lined up!

  22. Wedding Photography
    March 27, 2010 at 7:50 am #

    wow! nice comparison its really appreciable.we can participate more than one project at a time

  23. Charley @ Online STD Dating
    June 4, 2010 at 2:40 am #

    Yes, I agree internet marketing is like too many eggs in one basket. Its too hard to pick the best one.

  24. al spaulding
    July 8, 2010 at 1:03 pm #

    WOW! This is my first time at your blog and I must definitely say it wont be my last.. I love the value you are giving over here and this post was a prime example of that.. I will be sharing this on my facebook page also… Kudos!!

    p.s. I love the way you customized your hybrid newss theme… I must say I’m a bit jealous… 🙂 pleasure to meet you..

    http;//alspaulding.com

  25. Roger - Earn Residual Income Online
    August 22, 2010 at 12:26 am #

    I reccommend that you get one project up and running then start on another one, too many projects gets gets confusing, but… if managed properly will grow, and get multiple streams of income.

  26. ndrowes
    January 25, 2011 at 8:21 am #

    try to balance things out while trying to create multiple streams of revenue.
    Nice tips. it’s very useful.

  27. deepak ind
    February 18, 2011 at 4:12 am #

    And one day they stopped paying me and stopped tracking commissions and earnings on the backend of the site. I was pretty upset.

  28. Alex Yakubchuk
    December 15, 2011 at 12:37 pm #

    I completely agree that keeping all of your eggs in one basket is not a smart thing to do. We used to have great traffic coming to our website but after panda update it dropped. Its still not 100% back as it used to be so obviously we are hurting even though we are spending tons of money on SEO and website re-design.

  29. Henry Williams
    December 18, 2011 at 2:08 pm #

    Great information on 9-5 jobs and security. I agree that when running your own buisiness one should not spread himself thin. I also beleive that offering something free on the front end will help as well. Very good information

  30. PFT
    November 13, 2013 at 10:14 am #

    In today’s modern era it is mandatory to become financial stable and also try to find out multiple ways to earn so that you can enjoy living. Internet marketing is a source from where you can earn good revenue by just investing your part time and working from home.

  31. rega
    September 18, 2014 at 3:55 am #

    I completely agree that keeping all of your eggs in one basket is not a smart thing to do. For those who haven’t yet done this it is something to get going on. If the majority of your revenue comes from one channel and that channel dries up bad things will happen.

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