 As managers, we all know we have a responsibility to maximize our business’s value. One way to do this is to take a step back, look at all the things you and your team do each and every day, and strive to uncover untapped potential revenue streams. Revenue streams are more than ways to bring in money. They define how your business captures value and how sustainable your model will be over time. Choosing the right revenue streams requires understanding your industry, your customers, and your product or service. Today I’d like to break down some common revenue streams, highlight when they work best, and give examples to show how companies put them into practice… Product and Service Sales Direct sales are the foundation for most companies. Product sales fit best in consumer goods, retail, and manufacturing, where customers expect to pay per unit. For example, Warby Parker sells eyeglasses directly to consumers through an e-commerce model supported by showrooms, keeping margins higher than traditional retailers. Service sales suit industries such as consulting and IT. A company like Fiverr monetizes by taking a fee from freelance services purchased through its platform. The key consideration is the balance between customer acquisition cost and customer lifetime value. Licensing Intellectual Property Licensing is common in software, media, and biotechnology. ARM Holdings, for instance, licenses its semiconductor designs to manufacturers worldwide rather than producing chips itself, creating steady royalty income. A biotech startup may license a promising compound to a large pharmaceutical company that takes it through clinical trials. This model works best when intellectual property is defensible, scalable, and applicable in multiple contexts. Data Licensing Companies that generate unique, high-quality data may license it to third parties. Waze, before being acquired by Google, provided traffic and route data to broadcasters and municipalities. Similarly, Fitbit (now part of Google) has partnered with research institutions by providing anonymized fitness data. The value depends on uniqueness, accuracy, and compliance. Startups exploring this path must ensure strong privacy practices, as violations can undermine customer trust and create legal risk. Memberships and Loyalty Programs Recurring memberships are effective for businesses that rely on repeat use or strong communities. Peloton pairs hardware sales with monthly membership fees for access to workouts, creating predictable recurring revenue. In the consumer space, Starbucks Rewards drives loyalty by giving customers points for each purchase, which increases repeat visits and average order value. B2B SaaS companies often use premium support memberships, such as Salesforce Premier Success Plans, to monetize enterprise clients’ need for faster response and deeper assistance. How to Choose Your Revenue Streams The best revenue streams align with both customer expectations and operational strengths. Start by asking: What do customers already pay for in my industry? Which streams reinforce my brand and strengthen retention? Which ones require new capabilities or legal preparation? Most startups succeed by validating one or two streams first, then expanding into complementary models once core operations are stable. For example, Adobe shifted from one-time software licenses to a subscription model (Creative Cloud), which aligned better with user expectations and created recurring revenue. Here’s a list of revenue streams that go beyond direct product or service sales. These are commonly used by startups and small- to medium-sized businesses, depending on their industry, assets, and customer base: Licensing & Rights
Recurring & Membership Models
Performance-Based Revenue
Partnership & Ecosystem Revenue
Assets & Financing-Related Revenue
Value-Added Enhancements
Here’s a ranked mapping of revenue streams to industries, showing which are most common or effective for each sector. I’ve grouped them by primary fit and secondary fit so you can see what’s typically most practical. Note that startups typically succeed by starting with one or two core streams, proving profitability, then layering on secondary ones as they scale.
The Takeaway.
You can improve how your business captures value and how sustainable your model will be over time by developing additional revenue streams. Which revenue streams are right for you depends on your industry, your customers, and your product or service. What about you? Have you developed additional revenue streams for your business? Please comment – I’d love to hear your thoughts. Also, if you'd like to discuss your specific business and its revenue streams, please contact me. Thanks, Tom Myers
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 The uncertainty surrounding tariffs is causing considerable angst for businesses, both large and small. I consult for a housewares company that has seen its supply chain disrupted and COGS skyrocket. As part of our response to this, we’ve been discussing potential new sales channels with higher margins to reduce the pain of higher costs.
So I thought it might be timely to discuss sales channels, which might be best for your business, and how to evaluate each one. Selecting the right sales channel is one of the most consequential decisions you can make. It determines how you reach your customers, how you manage costs, and how quickly you can scale. The choice is rarely “one size fits all.” The best channel depends on your product type, margins, customer expectations, and operational capacity. Let’s review the various types of sales channels, and who should choose them… Direct-to-Customer (DTC) Best for: High-margin products, subscription-based services, and brands that benefit from direct customer relationships (e.g., specialty food, fashion, software-as-a-service). Criteria: Choose DTC if you require tight control over the customer experience and can manage marketing, fulfillment, and support in-house. This works well when you have a clear target audience and can reach them cost-effectively via digital channels. For example, artisanal skincare brands often thrive selling directly through their e-commerce sites, as they can tell their story and control pricing without retailer markups. Retailers Best for: Products that benefit from customer touch-and-feel before purchase or that need instant credibility (e.g., consumer electronics, home goods, premium packaged foods). Criteria: Retailers make sense when your product is differentiated but still needs discovery in high-traffic environments. You need the margins to accommodate wholesale pricing and the ability to produce in consistent volumes. Consumer electronics startups often enter through specialty stores to validate their product before approaching national chains. Keep in mind retailers expect reliable supply, consistent packaging, and marketing support. Resellers or Distributors Best for: B2B products, industrial goods, and services where customers value an established relationship with a trusted vendor (e.g., IT hardware, construction supplies, specialized software). Criteria: This route is effective if your buyers already have established purchasing habits and you lack the resources to build a dedicated sales force. Distributors provide instant reach to a broad customer base but take a significant margin. You must ensure your product fits their portfolio and offers them an incentive to prioritize it over competitors’ offerings. A SaaS tool for small manufacturers might partner with an industry-specific software reseller who can bundle it with other solutions. Making the Decision List your constraints and advantages: budget, sales expertise, production capacity, and desired customer proximity. Then map each sales channel to these factors. Many businesses start with one channel and layer in others strategically. Avoid chasing all channels at once. A focused, well-executed approach in the right channel will beat a scattered presence in three. The Takeaway. Choosing the right sales channel—DTC, retailers, or resellers—depends on margins, customer preferences, and operational capacity. Match your product type to the channel’s strengths, start focused, and use a checklist to ensure alignment with your goals and resources. What about you? How do you evaluate and choose sales channels for your products or services? Please comment – I’d love to hear your thoughts. Also, please connect with V2R on LinkedIn. Thanks, Tom Myers |
AuthorTom Myers is an accomplished business leader with over two decades of success building organizations from the ground up with multiple successful exits. He holds strong expertise in designing and implementing winning strategies, change management, improving operations, driving business development through sales, marketing, PR, and strategic partnerships, and effectively building and leading teams toward a common goal. He has effectively served in C-suite and Board positions in for-profit and non-profit organizations, and currently offers Fractional CXO and advisory services via V2R Ventures. Special thanks for images from rawpixel and 123rf .
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