[gigi]

Originally posted by *KK*@Dec 21 2004, 02:26 PM
PPS has a tremendous front end outlay of cash to make the payouts, especially on large amounts of signups. Bill PMBs done the math well enough in his example. He didn't, from what I saw, account for the tremendous administrative costs in fraud monitoring, nor did he account for credits and chargebacks -- AND FINES -- that are associated with large numbers of daily joins by large numbers of affiliates (forgive me for skimming if I missed something Bill) -- there is no way around this -- even the best intentioned affiliate - when being paid 35+ for a 3 dollar sale, is going to market the site in a manner that we'll refer to as "overmarketing" for lack of a better word.

The only way PPS has stayed ahead of the curve is by utilizing their leftover traffic to try and recoup some of the red money as fast as possible. I pay 40, I send my exits to others that pay 40 and hopefully for every 40 I pay out, I bring in 40. In a perfect world.

Instead, I pay 40, I might bring in 20 on each 40 if I'm lucky. So I'm only half in the hole from where I started. But wait, exits are getting harder, pops are getting harder, mailing is getting harder, upsells aren't exactly setting the world on fire, and cross sales are slowly but surely becoming extinct as well.

So I'm sitting her with a 20 payout per member on a 3 dollar sale. Ok maybe that's still too perfect a world but the math is easier this way. I now have to turn every member into an average of 20 bucks revenue just to break even. Member retention is at an all time low, sites are more expensive to produce than ever with reality and video content being the in thing. Yeah, there are those other expenses like bandwidth and content costs to factor into the mix as well, don't forget.

If I'm charging 40 bucks a month, and 1/3 of my members actually make it to the first recur, then I'm still sucking hind tit to the tune of around what, 4 bucks to the negative per member give or take?

I guess I'll make it up on volume.

Pretty much what was said above...you can lower payouts....

The entire PPS model depends on recurring members, trading non-producing traffic and upsells. You won't see an ROI for the first 3-4 months...that's a given.