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Originally Posted by bigdog
Alex if you were to open up a pps program how much could you afford to pay out per join?
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That is a good question. Prior to launching our program, I did a pretty extensive spreadsheet based on two programs with various payouts.
They were 60% revshare, PPS with 25.00, 30.00 and 35.00 payouts.
Consider these variables:
$3.95 trials
$34.95 full memberships
14% CC processing fees
Assume you have a 40% trial conversion to full memberships and each month 60% of those full memberships continue to rebill.
Lets evaluate how much 50 trials are worth.
50 trials less processing fees: $170.00
50 x 40%=20 full memberships: $600.00
Month 2 - 60% of those 20 will rebill which is 12: $360.00
Month 3 - 60% of those 12 will rebill which is 7.2: $216.00
Month 4 - 60% of those 7.2 will rebill which is 4.3: $129.60
Month 5 - 60% of those 4.3 will rebill which is 2.6: $77.76
Month 6 - 60% of those 2.6 will rebill which is 1.6: $46.66
Month 7 - 60% of those 1.6 will rebill which is .9: $27.99
Total dollars earned from those original 50 trials after 7 months: $1628.00
The value of those 50 trials is worth $1628.00/50 trials or $32.56 each
The question affiliates should ask, is what is the value of each trial not what is the value of each member.
If I was to pay $30.00 per join, I am left with $2.56 per join after 7 months.
Don't forget, that is $2.56 per join using the variables of 40% trial conversions and 60% of those continue to rebill each month.
So the question is, will $2.56 per join cover all the overhead costs of running a paysite? I think we know the answer is no. If the answer is no, then how can there be so many programs out there that offer these outrageous payouts of 30.00 - 45.00 per join?
Yes I know, I can earn dollars on exits, cross sales, upsells, email cancelled members...etc....I have figured that into my spreadsheet as well. So then that must mean these programs are making their income based on these other means of generating revenues. Hmmmm, really?....makes you scratch your head.