Can someone explain me PPS?

[pgmorin]

Hello,

I'm starting to look at the best way to share income with affiliates and I really dont get how the PPS work.

I have see those 75/100$ PPS and for me it make no sense or I'm missing something. I take my case for exemple. I plan to sell membership at 19.95 and rebill at 14.95 till I get more content to raise the price. If I give a PPS of 75$ that mean the customer have to stay 5 month on my website to break even.

5 month mean I gonna have to produce 20 x 10 minutes videos, and 25 galleries update for free for that affiliate customer before I start to make money.

Also there the problem with the cash flow if I get 4000 customer send by 75$ PPS affilitates that mean I gonna have to take 300 000$ dollars out of my cash flow and that money wont be making interest for me.

Most the customer from the stats I have see arround wont stay 5 month on the same website. They will leave after 2-3 month and come back later when there is new content.

So website owner how do you menage to make money when you do those kind of pps?

Thanks!

[BIGTYMER]

Simple.

Shaving and/or cross-sales

[pgmorin]

You forget money laundering also :P

[Rochard]

shoot me an email to rochard at gmail dot com and I'll fill you in on how PPS really works.

[bean-aid]

Great post. Just offer 150 pps and then just *disappear*. Or go legit and bang cards.

[brentbacardi]

So companies that offer high payout PPS have more cash flow than you. Your customers may not even stay that long if you are new to the game so you would really be out money if they cancel after 2 months because your content or site is lacking in some way. So yeah... don't do this... yet anyways!

[Emil]

Just bang the CCs when you got a lot of them, that's the normal thing to do these days.

[media]

Get out while you're ahead!!!!

[JamesM]

If you are starting a paysite then start with Rev-share.

see avg. how long customer stays active.

then go from there.
btw $75 is too much for paysite PPS.
it might be OK with cam site.

paysites make extra cash with xsales/upsells.

[pgmorin]

Thanks all for the information and yes I gonna go on Rev-share at first

[Phoenix]

fill your site up with awesome content.
www.memberchannels.com
more then a tube site has.

Why drop the price for rebills? We add new content daily.
the amount of payout per join doesn't matter as much to me...i like to count the amount of money at the end of the day.

I also suggest starting out with revshare though.

[ajrocks]

you are missing other monetization for sure. But yes, it isn't easy, affiliates expect massive payouts, there isn't much meat left on the bone these days

[signupdamnit]

As an affiliate $25 PPS is fine if:

- There is no shaving. This includes sneaky backup processors without affiliate commission
- You convert better than 1:2000
- There are no prechecked cross sales
- There are no or very minimal leaks
- Minimum payment no higher than $100

Run a fair program and we'll take $25, $30, or $35 PPS gladly. For some niches and a clean program $20 PPS would be great at this point. Most of us realize that $100 PPS on a paysite is usually bullshit and something is going on for them to be able to pay that.

[adultmobile]

Originally Posted by JamesM

btw $75 is too much for paysite PPS.
it might be OK with cam site.
paysites make extra cash with xsales/upsells.

What he said. Since cam user can spend $100,000 a year and even if it is 1 every 1000 pay members, this change the average income per signup quite big.

Even you probably you are reading a "$300 PPS" awe banner in top of gfy, I see it while I type this, that seems high even for a cam site.

[The Ghost]

Make a good exclusive site & update it. And go with revshare. PPS makes sense for certain gray/black business models, or if you have legit sites and only offer it to certain pre-screened affiliates at sustainable levels. Don't be fooled by anyone who promises impossibly high PPS.

Smart affiliates aren't fooled by that nonsense. At least ones that care about their customers and getting paid.


What type of site(s) do you have?

[_Richard_]

Originally Posted by signupdamnit

As an affiliate $25 PPS is fine if:

- There is no shaving. This includes sneaky backup processors without affiliate commission
- You convert better than 1:2000
- There are no prechecked cross sales
- There are no or very minimal leaks
- Minimum payment no higher than $100

Run a fair program and we'll take $25, $30, or $35 PPS gladly. For some niches and a clean program $20 PPS would be great at this point. Most of us realize that $100 PPS on a paysite is usually bullshit and something is going on for them to be able to pay that.

hit me up!

[sarettah]

Originally Posted by pgmorin

Hello,

I'm starting to look at the best way to share income with affiliates and I really dont get how the PPS work.

I have see those 75/100$ PPS and for me it make no sense or I'm missing something. I take my case for exemple. I plan to sell membership at 19.95 and rebill at 14.95 till I get more content to raise the price. If I give a PPS of 75$ that mean the customer have to stay 5 month on my website to break even.

5 month mean I gonna have to produce 20 x 10 minutes videos, and 25 galleries update for free for that affiliate customer before I start to make money.

Also there the problem with the cash flow if I get 4000 customer send by 75$ PPS affilitates that mean I gonna have to take 300 000$ dollars out of my cash flow and that money wont be making interest for me.

Most the customer from the stats I have see arround wont stay 5 month on the same website. They will leave after 2-3 month and come back later when there is new content.

So website owner how do you menage to make money when you do those kind of pps?

Thanks!

Years ago BillPMB explained how it all works very nicely, this is his post from another forum (starts with an O ends with an O) The numbers may have changed but the math stays the same (Interesting that you came up with the 5 month breaking even point too, means you have the math right):

Originally Posted by BillPMB

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"

[lucas131]

just go and try to signup to some high pps paysite ... i tried it and now i know what pps means ...

[Yanks_Todd]

The key is to figure out your customer lifetime value (CLV), your acquisition cost (AC) for affiliate driven traffic and your operating cost for each member.

The CLV is the average membership cost multiplied by the amount of re-bills plus each members contribution in terms of up-sells. I have found that you need ten months to a year of data to really get an accurate CLV.

The acquisition cost is the rev-share or PPS plus each members portion of the cost of your affiliate marketing to calculate an affiliate AC or your internal marketing to calculate an internal AC.

The operating cost is all your other costs divided by the amount of members you currently have.

Your eventual profit on each join is then your CLV -AC - OC = Profit

Your PPS can be up to 100% of your CLV-OC, however that would leave you no profit.

Here are my actually numbers for Yanks.com for one particular traffic source.

CLV = $122.93
Operating Cost Per Member = $5.66 per month (times 4.8 months)
Acquisition Cost Per Member from an affiliate = $61.47
Acquisition Cost Per Member Internal = 10.96

So on this traffic source I could potentially do a $95.76 PPS. However I have other sources where I couldn't do a $30 PPS without getting into trouble.

Of course you can get into a death spiral if your PPS is too high to re-coop fast enough. For instance if I did a $50 PPS on this traffic source and someone was able to send 10k joins I couldn't cover it out of the gate.

Hope that helps.

[Yanks_Todd]

Oh and BTW, I don't offer PPS, because this example is extreme. I prefer long term partnerships. They make more money for us both in the long run.

[Yanks_Todd]

Originally Posted by signupdamnit

As an affiliate $25 PPS is fine if:

- There is no shaving. This includes sneaky backup processors without affiliate commission
- You convert better than 1:2000
- There are no prechecked cross sales
- There are no or very minimal leaks
- Minimum payment no higher than $100

Run a fair program and we'll take $25, $30, or $35 PPS gladly. For some niches and a clean program $20 PPS would be great at this point. Most of us realize that $100 PPS on a paysite is usually bullshit and something is going on for them to be able to pay that.

This is all good stuff

[pgmorin]

There a lot of good information here Thanks a alot for the help. For those who asked my website is www.cosplay-mate.com, I'm on the last fine tuning step before official launch

[lucas131]

btw i always push revs, and there is few companies that i cannot convert from trial to full, but they still offer high pps ... now think, where are they taking the money to pay the pps? hope its still like in the past, revs w/o shit, pps with shit ... i hope otherwise ooops my karma ...

[seXXXhub]

they have money, u dont ... its simple

[CurrentlySober]

Easy - PPS = Poo Per Sale....

If I make a sale - You send me some poo...

Simples....

Whats not to understand???