Originally Posted by BillPMB another place, another time

ALL pps programs shave. Wake up and smell the coffee. Just do the math.

Variables

Number of Signups 500
Trial $2.95
Regular $39.95
PPS $35.00
% of Referred Signups 85%
Fixed Expenses $20,000.00

Monthly Retention Levels
Trial to Full 40%
Month 2 28%
Month 3 17%
Month 4 10%
Month 5 5%


Month 1
Initial $45,208.75
Recurring $244,893.50
Additional Income $31,546.88
Advertising Expenses $(455,918.75)
Processing Expenses $(72,147.04)
Fixed Expenses $(20,000.00)
Profit $(226,416.66)


At 500 signups per day paying $35 per signup billing $39.95 per monthly membership with fixed expenses at 20 grand a month for hosting, content, employees, etc with a chargeback ratio of 1% and billing fees at 10% a pay per signup program is almost a quarter mil in the hole at month 1 of the start of measurement. That's with a 40% trial to regular member conversion which is probably a fair number in surfing some of the member areas out there to see what is what.

That is at an 85% shave, where 15% of the incoming sales aren't reported or credited to the webmaster. At this rate of shave, the program starts making money at month 5 and actually starts doing ok thereafter.

If a program were not shaving at all, using just the income derived from the signups. No cross selling, upselling, NADA. Then at month 5 they would be 20 grand in the black for THAT MONTH, but still be over a half million in the red from the previous 4 months.

Now, if there were some method of only allowing your traffic to leave your sites when there were green lights at the intersections, then you'd have it licked.

BTW, if you'd like to know the point where you could start a PPS program and make money right out of the gate the shave % would be 42% . Where 58% of the incoming signups are not counted, credited or reported/paid.

42% would probably be the "weasel factor"