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Originally Posted by Alex From San Diego
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.
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We should examine Oxcash's Bang Brothers Online spin-off of last year. It started as a PPS only program paying $20 per trial and $35 per full membership sold. The BBO sites are cross sold into Nasty Dollars. All exits are credited and are only internal. This is the same as Nasty Dollars (and now Oxcash 5.0) $35 PPS with credit on exits (all exits internal), cross sold into Oxcash. BBO later added 50% Revshare.
$5.95 trial $34.95 monthly
Perfect Gonzo is another excellent example. They have two (now three) exclusive sites priced at $4.95 trial and $29.95 monthly. The key is the internal cross sale and the internal only credited exit.
PPS works if you have exclusive content with serious brand development and either multiple sites or multiple programs to cross sell.
Both programs dedicated a massive amount of effort culling free site traffic directly through its hosted galleries, gallery spot purchases, and internal TGP networks.
Perfect Gonzo's business model is stunning. They relied on no affiliate for traffic. It was all purchased simultaneously for concentrated brand building. Once they juiced the networks for themselves, PG released it to a second tier of webmasters. People always ask how Nasty Dollars and Oxcash keep selling - it's the brand.