July 2020

Welcome back to Flexibility Is Freedom!

I hope you're all having an awesome summer and getting lots of sun (& vitamin D).

This month's featured image is my Mom's vegetable garden, where we're currently harvesting lots and lots of tomatoes (hothouse and cherry tomatoes).

Here in my home province of Ontario, we are also celebrating the end of our emergency phase, as it relates to COVID-19, and moving into the recovery phase.

In a similar way, July 2020 was a recovery month for my passive income business, as revenue bounced back to May 2020 levels, up from the bottoms of June 2020.

In this month's income report, I'll talk about the projects that I've been working on to both increase and diversify my income, following the Amazon Associates rate cut in April.

Key Metrics

• Revenue: $950 (+37% MoM, +395% YoY)
• Sessions: 11,364 (-13% MoM)
• Revenue per Thousand Sessions: $84 (+58% MoM)
• Amazon Risk*: 50% (down from 59% last month)

*Percentage of revenue from Amazon Associates programs

Here's a chart of Revenue and Amazon Risk (which I really liked from last month's post):

As you can see, revenue has recovered to May 2020 levels, just $50 shy of $1,000.

However, I've managed to reduce my Amazon exposure to 50% this month, down from 80-90% levels in Q1 and 60-75% levels in Q2. This meets my previously set goal of 50% and I'd like to reduce my Amazon exposure even further to 25-30% by the end of 2020.

In the last 3 months, I've been busy executing Part 1 of my post-Amazongeddon strategy (as outlined under "Evaluating Alternative Retailers" in my April 2020 post).

In a nutshell, I've been redirecting my traffic to alternative retailers like Sephora, Ulta Beauty, and direct-to-brand, where possible, while taking into consideration the effective Earnings Per Click of each merchant (which requires some time for data collection).

(side note: most of my original content on scar products did not have alternative retailers, at least, none that had an affiliate program. This really highlights the importance of having a diversity of merchants to work with for any given product.)

Next up, here's a chart of Sessions and Revenue Per Thousand Sessions:

So here's where things get interesting:

• You might be wondering, why did traffic decrease but revenue increase, last month?
• Or, why did traffic increase but revenue decrease, in April 2020? (Amazon rate cut)
• Overall, this is due to differences in profitability across different types of content, monetization opportunities (i.e. effective EPC of different merchants), and changes to user experience to optimize conversion rates (i.e. get more users to click)

Last month, I talked about how most of my content portfolio became very "low-profitable" following the Amazon Associates rate cut (not unprofitable, but yielding only 1% on low traffic and low conversion rate keywords).

That's why I decided to remove almost all of this content in mid-June (but only after examining each post individually based on Google Search Console and Google Analytics data; I also added 301 redirects to preserve any "link juice" these posts may have received).

I then focused on my top-performing posts, in many cases, completely rewriting them, for better SEO (ranking & traffic), better CRO (user experience & conversions), and better monetization opportunities (merchant diversity & effective EPC).

I believe these two steps (a. removing low profitability content, b. doubling down on higher profitability content) led to the paradoxical traffic decline and revenue increase in July 2020.

Next Steps

I did have a few more ideas that I wanted to discuss, but none of them require a full section at this point in time. Here are some of them:

1. Continuous Content Optimization

• SEO: both on-page and off-page projects to grow TRAFFIC. I'm still writing my own content but using different agencies to acquire backlinks (SEOButler, Authority Builders). I might consider hiring a private link builder or getting an Ahrefs subscription and doing outreach campaigns with the intention of paying for link insertions on aged articles (rather than proposing guest posts).
• CRO: I started using Hotjar to collect valuable data on user behavior through heatmaps (scroll, click, tap) and screen recordings. This is helping me understand how to create better CONTENT that keeps users engaged and leads to higher conversions. I also tried out OptinMonster but decided not to buy the subscription.
• Monetization: I'm tracking profitability on a page and product level to calculate EPC and understand which pages/products are really moving the needle. This helps me identify the top-performing pages/products and spend my time accordingly.

2. Private Affiliate Programs

• I've joined more "private" affiliate programs (not actively marketed on a Network) in the last month and I think there's a growing trend of small-to-medium merchants, especially ones doing dropshipping types of businesses, that are starting affiliate programs to reduce their business dependence on Amazon's platform. This is really positive for the e-commerce industry and something I'm going to keep exploring.

3. Social Media & Content Cross-Pollination

• I am now starting to build out my social media strategy and activities, as a way to build traffic diversity (not just relying on Google). However, I recognize that user intent (and ultimately, conversion rates) will vary based on the traffic source.
• In other words, when people search Google for something, they are looking for a solution, answer, product, or place, and are more likely to "convert" if they are presented with the appropriate information (this is "pull" marketing). But users who are on Facebook, Pinterest, Instagram, YouTube, etc. might be only "curious" or "browsing" as they are not actively looking for a solution; hence I would expect lower conversion rates (this is "push" marketing).
• The way I'm thinking about social media is to create content once, and then distribute it across multiple platforms, but in the most appropriate formats. When you think about different content formats, it's generally: i) text, ii) audio, iii) image, iv) video. And each platform is specialized (sometimes) in each part: i) Google (text, but also image/video results), ii) Facebook (text, image, video), Pinterest (image), Instagram (image, video), and YouTube (video, but adding image).

That's it for this month. In August, I plan to take a bit more of a break from my business, enjoy the summer weather here, and work on my personal health & relationships more.

Overall, as I stated in my H1 review last month, I still feel very optimistic about my business, all things considered. While there will always be temporary setbacks like the Amazon rate cut, or another Google algo change, or a worldwide pandemic, if you can build a level of psychological resilience and willingness to adopt change, in a relatively quick manner, then I think you're not going to be worried about the next obstacle in your way.

The other thing is that you have to look at how the world is changing and what kinds of industries, technologies, and skills, are going to be in demand in the near future. And from my perspective, I think the world is now accelerating towards the digital/e-commerce economy, even more so with the pandemic situation, then ever before. We're going to see more and more business models pop up, that leverage the increasingly digital consumer and increasingly technology-driven business and supply chain. Whether that's food delivery, driver-less taxis (no risk of COVID there), or the next Tik-Tok, I think this new decade will be one of massive innovation and creative destruction.

Until next month,

Tom