Revenue Architecture: Primary, Secondary, Tertiary
Think of this like building a house: foundation, structure, embellishment. Each layer builds on the previous, unlocking new forms of value.
Thinking this way about the business architecture helps businesses to:
Sequence growth - Start with a core, then layer on extensions, enrichments and ecosystem plays.
Diversify risk - If a primary revenue dips, secondary and tertiary can buffer.
Scale smartly - Tertiary revenue often grows without proportional effort.
Primary Revenue – The Core Product or Service
This is the main value exchange that defines the business. Examples:
Retail - Selling physical products.
Consulting - Charging for time or expertise.
SaaS - Subscription to core software.
Hospitality - Room bookings or dining.
Education - Tuition or enrollment fees.
Characteristics
Direct
essential
customer-facing
predictable (once you have established the product-market fit)
Secondary Revenue – Value-Added Extensions
These enhance or complement the primary offering. Examples:
Upsells / Add-ons – Premium features, accessories, upgrades.
Cross-sells – Related products or services.
Support / Maintenance – Ongoing help or servicing.
Training / Onboarding – Helping users get more value
Licensing / IP use – Letting others build on your core product.
Characteristics
Optional (therefore harder to predict)
supportive
tends to increase customer lifetime value
Tertiary Revenue – Ecosystem Monetization
This layer leverages the system that has been constructed around the business. It is often often indirect or passive. It may have nothing at all to do with the actual thing you make or provide.
Advertising / Sponsorships – Monetizing attention or audience.
Affiliate / Referral fees – Earning from influence or trust.
Data monetization – Selling insights or analytics.
Platform fees – Charging others to transact or build.
Royalties / Syndication – Getting paid for reuse or distribution.
Characteristics
Indirect
often scalable
often passive