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Your logic is flawed. If you pay a guy $50.00 for selling a single $3 item, you're out of business. However, that isn't the model we're working with. This is more like selling a guy a $3 item that, if he forgets about it for a couple of days, will become a $40 item. Also, when you sold him the item, you threw in a shitload of catalogs of similar items for him to look through and you'll pick up extra money if he buys any of that (upsells).
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Hehe I knew someone would tag me on this, but that's why I said "Quick calculation".
What are the actual percentages of people who forget to cancel? What are the actual percentages of people who retain memberships at most of these sites? Come on, we've all visited some of these paysites at one time or another and taken a quick peek inside their members area. Most of them blow chunks and I can't imagine that many people sticking around.
I was going to go into details on how the salesman I paid $50.00 to would get me customers that I could upsell to, etc. but in the long run the percentages just wouldn't ever work out high enough in my favor. That's why shaving goes on.
If you're going to tag me and say my logic is flawed, and that the companies actually do make money from retaining memberships, upselling, etc. then you're going to also state that shving doesn't happen. Otherwise the execution of my logic might have been screwy, but the end result is the same. You can't make an
honest profit by paying out 10 times more than what you take in.
Jak