Originally Posted by Alex From San Diego

Show me a program that 60% or more of their current members rebill month after month : ))

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.

Originally Posted by andrej_NDC

of course, its not that easy to have 40% trial to full conversions on all types of traffic, therefore I said, that programs with GOOD retention can pay per SU easily, others cant :)

Originally Posted by andrej_NDC

you was the one who started with the 40-60% math :) I do not say, many programs have such good retention.

Originally Posted by Mike33

Isn't it the big boys supposedly with the crappy members areas (which translates into bad retention) that are always paying out the highest PPS?

I'm seriously inquiring, not judging or condemning.

Originally Posted by bigdog

so alex do you even promote pps programs these days?

Originally Posted by andrej_NDC

yes, some of them have really bad members areas...but for example if you get $5 NET on each sale(PPS program), its harder for a program that get 100 sales a day to pay that, than for a program with 5000 sales per day...they get the profits on high volume

Originally Posted by bigdog

is anyone really doing 5k joins a day accept maybe the python crew

Originally Posted by andrej_NDC

yes, some of them have really bad members areas...but for example if you get $5 NET on each sale(PPS program), its harder for a program that get 100 sales a day to pay that, than for a program with 5000 sales per day...they get the profits on high volume

Originally Posted by Alex From San Diego

It is all relative regardless if a program does 100 sales per day or 5000 per day.

100 sales per day with 30 PS has to pay out 3k per day or 90k per month

5000 sales per day with 30 PS has to pay out 150k per day or 4.5 million per month

What that tells me, you better have plenty of start up capital....LOL

Forget salaries and overhead....you need around 1.5 million in reserves just for a program that is doing 100 sales per day....lol

Numbers don't lie and never will...sorry but I minored in mathmatics....lol

Originally Posted by andrej_NDC

yes, some of them have really bad members areas...but for example if you get $5 NET on each sale(PPS program), its harder for a program that get 100 sales a day to pay that, than for a program with 5000 sales per day...they get the profits on high volume

Originally Posted by Mike33

For instance, even if the program is doing 5000 in sales it would still be losing in the end if we assume that 40% trial conversion become full memberships and each month 60% of those full memberships continue to rebill.

Originally Posted by bigdog

if pps programs are shaving, what techniques are they using to shave so they don't get caught by an affilate doing test joins

Originally Posted by Mike33

I'm just thinking that the actual number of sales per day wouldn't make a difference in profit margins because that would assume that the ratio in Alex's calculations changes at some value of sales.

For instance, even if the program is doing 5000 in sales it would still be losing in the end if we assume that 40% trial conversion become full memberships and each month 60% of those full memberships continue to rebill.

Originally Posted by Alex From San Diego

Exactly my point Mike...you will always lose reagrdless of how many joins per day comes through the program....if you net 5.00 per join, it is still 5.00 per join....LOL

I think you understand Mike : ))

Originally Posted by Mike33

I'm just thinking that the actual number of sales per day wouldn't make a difference in profit margins because that would assume that the ratio in Alex's calculations changes at some value of sales.

For instance, even if the program is doing 5000 in sales it would still be losing in the end if we assume that 40% trial conversion become full memberships and each month 60% of those full memberships continue to rebill.

Originally Posted by andrej_NDC

how can they lose money when they make $37 per sale only with rebills? As I heard before, PPS programs often dont pay on check, dialer and other revenue, so add another 20-30% to it + cross sales, upsalles, mailings(each member email is worth $3+ for sure)

Originally Posted by Alex From San Diego

You need to contact me and show me how each members email is worth 3.00....better yet....I'll give you my entire database of emails for 1.50 each.

You can double your money....LOL

Originally Posted by andrej_NDC

so you say that 100 sales a day and $500 net profit is the same like 5000 sales a day and $25000 profit?

Originally Posted by andrej_NDC

how can they lose money when they make $37 per sale only with rebills? As I heard before, PPS programs often dont pay on check, dialer and other revenue, so add another 20-30% to it + cross sales, upsalles, mailings(each member email is worth $3+ for sure)

Originally Posted by DeadFidel

Alex, although I still disagree with you on certain cost factors, I have to admit you are very good at crunching numbers

Originally Posted by bigdog

how much your emails are worth depends if you can get whitelisted and wind up in a surfers inbox

Originally Posted by Burridge

Alex -

Can you link to that Adult Legal place you speak of where you can license DVD's?

Originally Posted by Mike33

It would be great if a PPS program paying beyond $35 per join would jump into this thread and show how the numbers game can actually work. Actual earnings don't have to be known. Simply substituting hypothetical numbers like "50" and working out the ratios and percentages based on those hypothetical numbers would show that it either works or it doesn't. Dispelling the myth and proving number crunchers like Alex wrong would be more than welcome. I've crunched the numbers myself before and came up with similar values Alex did. I swear on my life that I'd love to know what I'm doing wrong just to know that I'm wrong.

If Alex had included fees, hosting/bandwidth, maintenance, staff, the numbers would have ended up in the red.

I have thought of alternate explanations such as a "loss leader" in which case the PPS actually loses money but the revshare portions, upsells/crossells, mailers, and product sales (tangible like pills or non-tangible like eraser software) pick up the tab. But that too would be rather risky.

I'm not a math wiz. Is there anybody here majoring in math that could do calcuations to make a $35 PPS scenario work out?

Originally Posted by Veterans Day

being VERY resourceful you could pull it off for 5-7k range. Dont worry 98% of all paysites are average, disregard the previous comments made :xmas-smil

Originally Posted by bigdog

i hear naughtyamerica does something like 40% trial to monthly rebill

Originally Posted by Lenny2

I've spent 20k on the site I'm about to open....almost all of it on content and programming/design.

The hosting costs don't really come into play until the site is live and people are joining.
Now I'll probably spend a shitload more after I get back from Vegas on marketing, buying traffic, shit like that.
Plus you always have to have to content people constantly going....you need to update often.

Alex's numbers are a little high....content costs will vary depending on your niche. A softcore teen site is much cheaper to produce content for than scenes of a teen getting gang banged by 4 black guys.

But whatever the costs are, a paysite should definitely NOT be your first, or even your third venture in this biz.....you need to be able to support your paysite with traffic that you alone send (or buy) because affiliates are hard to get.

Originally Posted by Alex From San Diego

Thanks : ))

I just love the numbers game.

Originally Posted by Sunny Leone

That sounds about right. My site is average and it is doing great for average. I dont have hardcore on my site and guys still like me. Dont expect to make what some big porn sites do but you can make a living off of it. Just stay on top of it. Everything I have learned has been from the guys on this site. Post some pic's and i am sure the guys will help you out with knowledge.

Sunny Leone

Originally Posted by bigdog

i hear naughtyamerica does something like 40% trial to monthly rebill

Originally Posted by UniversalPassLorence

It all depends on the quality of content, if it is exclusive or not, & how much content.

Originally Posted by iBanker

You hit it right on the head. If you put shit in, you will get shit out. We live by the phrase "quality (exclusive) NOT quanity".

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.