This is about sponsors closing their affiliate program not their entire business altogether.
I can see how all of the costs can cause someone to close shop if the business isn't profitable, but I'm talking about sponsors who stay in business (sites still online accepting memberships) but close the affiliate program only. Sure they can keep the revshare from their affiliates sales as it slowly declines but eventually that's going to run out and in the long run they're just turning away future sales and the monthly $14.97 revshare cut they get on the sales affiliates send them.
Quote:
Originally Posted by TheDoc
The average paysite join is still worth $70-$90 each, with rebills of course and time, so let's say $80. Let's assume the processor takes 12%.
Taking processing out,
At $80 it's: $70.40
At $70 it's: $61.60
At $60 it's: $52.80
Revshare Profit: No reason to include content, hosting, etc.. it equals out assuming the program is alive to some degree.
At $80 it's: $70.40 at 50% split $35.20 profit
At $70 it's: $61.60 at 50% split $30.80 profit
At $60 it's: $52.80 at 50% split $26.40 profit
On the PPS side
At $80 it's: $70.40 with $30pps = $40.40 profit
At $70 it's: $61.60 with $30pps = $31.60 profit
At $60 it's: $52.80 with $30pps = $22.80 profit
A hair over two months and the PPS program is passing the Revshare program in profits.
PPS Programs which convert as well as Revshare Programs, often pay on less join methods, exits, xsales, upsells, and emails. The profit margins are without question higher and more stable on a PPS Program.
That's why Revshare programs are closing down, they make less money than PPS programs when ran correctly. Any program type can fail, only one type though is locked into a profit margin that they can't escape from. That margin when you don't update, promote your sites directly, etc... get's very thin, very fast when you're always having to give out 50% - even if the affiliate isn't actively promoting you. Unlike PPS, when an affiliate stops promoting, it's all profit for them.
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Great post. That really puts PPS vs Revshare into perspective.