Quote:
Originally posted by emmanuelle
Not Joe: Whether it be the feeds that I am purchasing from you, or my paysites; I think that we can both agree that there are fixed costs. In the case of your feeds, it is easy to assess a per user cost. In the case of running paysites, our expenses are reasonably fixed overall, whether I have 5000 members, or 5500 members. I still pay the same for utilities, staff and content. I can afford to bend certain ways in order to increase revenue, without increasing expenses.
We ran our sites successfully with no affiliate program for 4 years. I suppose it could be said that we lose money on every member sent by an affiliate. That sort of thinking is obviously short term. Yes, we make less per sale than we did before on our own, but overall our success is exponential with the help of sales we would not otherwise have had. 123bill is exactly the same sort of scenario.
Long term vision is what creates longevity around here, not living for the moment.
|
While you may increase your revenue you will also increase your expenses on the transaction processing fees for those accounts.
Let say you're paying me 60% on the sales and paying the guy who referred me his 10% commission and then you're paying 35% for the processing. Using those numbers it looks like it would actually cost you 5% for every sale made.
When it comes to overhead though you guys are already paying people, rent, and whatnot so there isnt like there are additional costs to use this, you can pretty much swallow it up really.
The only way to recoup the lost 5% is to hopefully make an upsell... Of course you could always pay affiliates their percentages based on the sale amount less processing fees...
Like i said, if you're pushing the sales yourself and/or you have a great markup on your product then this will work for you and sounds like a sweet idea.