How to Manage the Risk and Reward of New Revenue Streams


The more sales channels you open, the more customers you reach, the more sales you close. Seems like simple math. Yet, managing and servicing multiple revenue streams is not without challenges. The allure of a new revenue stream is understandable: added cash flow, more customers, and presence in new markets. But, risks including increased production requirements, new rules and regulations, and greater overhead, often leave business leaders wondering if the rewards outweigh the risk.


The pandemic forced many entrepreneurs and small businesses to move beyond their usual business models and move their businesses online at unprecedented rates. Ecommerce’s share of global retail trade rose from 14% to 17% during the pandemic, a significant jump in a single year. By late 2020, 71% of employees who said their job responsibilities could be performed at home were working remotely all or most of the time. As consumer lifestyles changed, buying behaviors changed, and markets evolved. Businesses who have yet to embrace new digital revenue streams risk missing out on new market opportunities.


How can businesses manage risks while implementing new digital sales channels and cash in on new revenue streams?


Start with self-examination


When exploring new revenue streams, begin by asking yourself a few key questions:



  • Which direction is the market heading?
  • How well are your existing channels performing?
  • Are you able to easily track orders, volume and total revenue at each point?
  • What leverage do you have in your current business for new revenue models?
  • What is your cost to serve this new channel?
  • Can you deliver an excellent customer experience?

Starting with self-examination helps organizations analyze their business goals and evaluate existing channels. From there you can better determine whether a new distribution channel can help you achieve your goals, or whether improving the performance of an existing channel will be a more effective strategy.


Make long-term investments


The past year-plus called for a nimble, adaptable business approach. For most, opening a new revenue stream during this time wasn’t a matter of strategy, rather a matter of survival. Consequently, it may feel natural to write off the changes made during this time as temporary. In reality, the payoff may be far from over. As manufacturers launched ecommerce sites, direct-to-consumer brands began selling wholesale, and firms dabbled in the subscription economy, many realized new profits and reached new audiences that make these channels worth keeping. Before reverting to established business models, carefully assess that channel’s performance and ROI. How does it compare to that of other channels?


Orchestrate consistent pricing


If a customer can buy from one channel at a lower price, they will. Failure to develop and communicate a fair pricing strategy can jeopardize your distribution plan and strain relationships with your partners. Your focus should be minimizing conflicts across channels. An order management system with price management goes a long way here. By understanding your margins and centrally managing pricing in a single place, pricing strategies for each channel can be set to eliminate any conflict.


Strive for supply chain visibility


Gaining greater visibility into every aspect of your supply chain is key to streamlining fulfillment across new and existing sales channels. Putting the right systems in place to meet increased production requirements will make or break any new revenue stream. Understand your new demand, appropriately allocate resources, and schedule and oversee production to help ensure products are available to sell as promised. The ability to anticipate and predict when and where customer demand will occur can help ensure that stock moves efficiently through online and offline channels with minimal delay or disruption.


Those businesses that adjusted and invested in new channels and technology experienced tremendous success and are now in a great position to capitalize on a post-pandemic boom. With a little foresight, and the right systems in place, you’ll build a strong foundation for long-term success.

Digital & Social Articles on Business 2 Community

Author: Lisa Schwarz


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