So let me start out by answering your first question: where does the income come from? I go into this in greater detail in my How to Make Money from a Blog post, but it sounds like you’ve got the idea. My main source of income is through ads, but I also earn money through my books and courses, affiliate commissions, my Etsy store, and occasionally sponsored posts.
Earn a living doing what you love! Whether you have been blogging for years or just a few weeks, How to Blog For Profit (Without Selling Your Soul) will prove a valuable resource. The expanded second edition, offers solid advice and practical action plans for creating an authentic, successful, and profitable blog.  Ruth Soukup shares how she grew her own blog to over one million monthly visitors, while earning a full time income, and writing about the things she truly cares about. In this book you will receive actionable steps to be able to achieve your goals:

Your first step in starting a blog is deciding on a niche. Maybe you've already selected a niche. Maybe you haven't. Your niche will essentially be your content angle. What will you write about? What information will you convey? Will it be about a specific industry? Maybe it will be about a certain area of skills or personal development? Whatever it is, decide on it now.

Lets say, for example, that you refurbish and resell used smartphones out of your home. You could use a blog to attract visitors to your website where you list your current phones for sale. Your blog might cover topics about DIY refurbishing. On one level, it seems counterintuitive because you want people to buy your phones, but it also helps you build a brand and gain recognition. Social media guru Jay Baer explains the concept on Copyblogger:

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