Income Report: Q3 2018

It's been a whole year since the last TMM income report. Let's see what happened since Q3 2017…

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I know, I know…it's been a while. I haven't published a quarterly income report since Q3 2017 (about a year ago).

What happened? A couple of things:

1. These reports take a long time to produce, which meant…
2. I was spending less time writing about style (which also takes a lot of time and energy).
3. The income reports sometimes felt a little “off brand” or random.
4. Lastly, as the business started to grow, I sometimes felt a little weird about sharing exact revenue numbers.

For all of those reasons, I simply chose to stop doing income reports after Q3 2017. I didn't even do an annual review for 2017 (like I did for 2016 and 2015).

So why start back up? Believe it or not, these “behind the curtain” posts were pretty popular, despite the fact that they have nothing to do with men's style.

I get a lot of questions about blogging, being an influencer (I hate that word) and making money online. I've even had a few people reach out and ask when the next income report would be published!

Plus, I kind of miss writing these. I track my revenue and expenses each month in an extremely satisfying, color coded spreadsheet.

But putting a public-facing income report together really forces me to comb through the numbers and think about the past three months.

Producing these reports is a good exercise for me, and since they're well-received, I've decided to bring them back.

Rather than going back to fill in the gaps, I'll just pick things back up at Q3 2018. Let's get into it!

TMM Revenue (Quarterly)

Let's start with the big picture:

You might notice that after a sharp peak in Q3 2017, this chart starts going in the wrong direction.

Allow me to explain…

Q3 2017 was the peak of my willingness to publish sponsored content. I did about one sponsorships each month.

Paid partnerships are an extremely lucrative way to monetize any sort of audience platform – blog, YouTube, Instagram, Google+ (heh, jk). But I've never loved taking on sponsors.

Don't get me wrong: I'm flattered that brands want to work with me. You should be too, because that means they value you as a potential customer. I've worked with some awesome brands, and I think sponsored content can be great if it's done the right way.

But it's hard to be 100% unbiased and objective when money changes hands, and anyone who says otherwise is lying to you (or worse, to themselves).

In my opinion, too much sponsored content waters down your voice. It makes it hard for your followers to know what you really think, which products you really recommend buying.

I mean, how many times have you read a glowing review for a product, only to realize that the whole article was sponsored by the company who made the product?

For lots of reasons, I decided to scale way back on sponsorships. In fact, there have been a few months this year where I didn't do any sponsorships at all.

Yeah, it's leaving a substantial amount of money on the table. But it feels great!

Note: this table doesn't include income earned from my partnership with Peter Manning NYC. This arrangement made it easier to say “no thanks” to the vast majority of sponsorships opportunities. Double win!

Show Me the Money

Now that we've got all that cleared up, let's talk numbers. Revenue from TMM falls into three categories:

1. Advertising (includes sponsorships)
2. Affiliate commissions
3. Selling products

Let's look at each category for Q3 2018 (note: some of the links below are affiliate links).

Advertising – $16,927 (down 30% from same period last year)

During the same time period last year (Jul, Aug, Sep), I did 3x as many paid partnerships (compared to Q3 this year), hence the 30% drop year over year (YoY).

Honestly, I'm okay with this.

The rest of the advertising revenue comes from display ads you see on this site, plus YouTube ad revenue (Google AdSense).

Affiliate – $7,314 (down 27% from same period last year)

I think this YoY drop is due to two things:

1. Q3 2017 was an unusually strong quarter for affiliate revenue
2. Amazon lowered their commission rates last year, which has caused a steady decline in revenue from that program

Affiliate programs have always been a small part of my business, but I know other content creators who do really well with them.

It's definitely something I want to focus more on going forward, especially since affiliate income is truly passive.

Products – $1,643 (up 49% from same period last year)

This category includes digital products (The Modest Man Style Guide) and physically products (the occasional sale on Grailed, etc.).

In July, I paired down my watch collection by selling a bunch of them off via Instagram. This is more for fun than for money. It's nice giving someone a good deal and seeing a watch or article of clothing go to a good home.

The Style Guide is good for about $200/month on average. It's a solid guide, but I haven't updated it in a while, and I do almost nothing to promote it.

But again, that's 100% passive income…the best kind!

Grand Total = $25,885 (down 27% from same period last year)

Passive = $21,095 (up 3% from same period last year)

I decided to start tracking how much of the revenue from TMM is passive (i.e., doesn't require routine, direct input from me).

Sponsorships are not passive. Display ads are passive. Affiliate programs are passive.

I like passive income. To me, it's way more valuable than any other kind of income.

Going forward, especially considering my partnerships with PMNYC, my goal for TMM is to grow the passive side of the business.

Sure, I'll still do some sponsorships, but I'm being super picky about them. Any company I work with has to: a) be an excellent fit, and b) have the right budget. If this means one per month, one per quarter or less, that's fine.

What About Expenses?

I'm not going to list out every single one-time expense anymore because, frankly, it's very tedious. Of course, I do track these in my accounting software (Wave).

But here are the monthly recurring expenses, totaled for the quarter:

• Rent (Studio) – $2,025
• Virtual assistant – $900
• WP Engine – $747
• Phone – $330
• ConvertKit – $202
• LeadPages – $201
• Internet – $120
• Adobe CC – $63
• SmarterQueue – $60
• Bluehost – $60
• Canva – $39

Total Recurring Expenses = $4,747 (roughly the same each quarter)

That leaves us with a Q3 2018 profit of $21,138 (or about $7k per month).

Again, this doesn't include income from Peter Manning NYC, which I'm keeping separate from TMM.

Last year, I was all about increasing the bottom line, hence the record sponsorships revenue in Q3.

This year, I'm thinking long-term:

What kind of business do I want to have? How do I want to spend my time?

What sort of content do I want to be known for? What am I willing to do for more money? What won't I do?

At the end of the day, I have plenty of money to live comfortably and invest in growing The Modest Man. I'm very happy with my current situation.

I hope this report is informative and maybe even a little inspiring. If you have questions about any of this stuff, feel free to ask me down in the comments.

Thanks for reading!