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[State of the Industry Debate]: PPS & Affiliate Programs
I wanted to open a discussion/debate on PPS for Affiliate Programs.
It is my observation that Paysites who run PPS program where the payout is higher than what they take in the first month, run a numbers game in hoping the member rebills and doesn't cancel or cause chargebacks.
A huge influx of signups from affiliate webmasters doing their job to send traffic, could cause a paysite to have to payout more money than they take in... factoring in time for money to actually get into the paysite's checking account, and still running in the red the first month.
A paysite would have to have a large reserve (float) of cash to offset this economic issue.
Program owners like Lars with large payouts, have the bankroll to handle a successful spike of signups and are able to payout affiliates.
Programs like Xpays HotelHeiress have a PPS that is less than the monthly charge to the member, so therefore they atleast breakeven during first month of a member signup.
Between Xpays and Lars, there is a multitude of paysite programs with varying levels of payouts, but it seems that affiliate webmasters are attracted to the higher payouts, while also taking into consideration the timeline of being paid out (ie. payouts are done as scheduled).
Certainly the concept of shaving comes into play as almost a necessity for a paysite program to handle the imbalance, but that issue has been bounced around so much that it's basically an accepted necessary evil that happens and affiliate webmasters on the most part are content with the payouts they are receiving, not realizing or missing what is actually owed to them.
With more and more competition from "reality based" content websites that popup overnight with anyone that has a camera, and free stuff out there, Do you see the Affiliate Programs evolving themselves to move towards lower payouts (like the Xpays example)?
Will those with deep pockets (the Lars example) be able to woo affiliate webmasters because of the payouts, causing other paysites to have to offer the same, and possibly risk financial trouble and friction with affiliates if they miss a payout due to the financial teeter-totter?
discuss.
Fight the Popcorn!
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