How can an affiliate program not afford to stay open? This shit doesn't make sense..
 

I really don't understand why these sponsors are closing their affiliate programs, sure you can't offer $30+ PPS anymore for obvious reasons, but what is the harm in running revshare?

It doesn't make any damn sense that they have to turn away affiliates who are sending them traffic and sales.. we are on commission not salary.

those were all broke as joke programs anyway or else just straight up stealing from those unaware.

The majority of people running them didn't even graduate high school, they are some of the biggest idiots on this planet.

Ok but I still don't understand how someone could be dumb enough to turn away money if they are closing it for financial reasons.. it doesn't cost anything to run revshare besides bandwidth. Like wegcash for example, I have typeins for one of their sites and went to grab some tools and they're closed, haven't they been around forever?

Has to be some kind of explanation.

most were quiet about closing. affiliates that didn't see the announcement kept up the links. they keep the money from any future sales. since none of these programs that closed their aff programs has ever paid out money owed we can safely assume they are just thieves.

some people are just crooks.

The majority of them keep their sites up even though they close their affiliate program. They never end up paying affiliates what they are owed, or past rebills anymore. Complete fraud.

I wonder what's worse. "Closing" your program while keeping everything running. Or keeping everything running, never "closing", and never paying.

Both despicable.

They close program, so they income on all rebills, none removed links and not payed balance, they then open new program and enjoy in life...

Because they got to bloated and we are in a recession?

Break down revshare with no cross-sales.

$29.95 sale
Minus $4.20 for processing.
Minus $15 for affiliate
Minus affiliate managers cut $2.95
Minus accounting, other staff, hosting ect.

Not much meat left on the bone after that.

That makes perfect sense
:2 cents:

revs ftw!

Ok but a little meat on a bone is better than no bone at all.. wouldn't you rather make $2 from the $29.95 than $0?

I can see how closing it and keeping all the rebills and traffic makes sense, but it's going to eventually die out and it doesn't seem very wise in the long run.

Edit: oh, close up shop and keep all the money, and then open a new shop. I see what you did there.

do the math... there is $7.8 left after the quoted figures... out of that there is content cost, accounting, office staff, rent etc... then figure in a 40%-60% drop in sales pushing all the cost higher percentage wise... is it really worth the effort for $.50? might even go to a loss when you figure staff and office expenses as well as content..

Apparently, your math is wrong or it's very much worth it going by the surplus of revshare programs in existence doing 50% and 60% just fine for almost a decade or more. Let's ask them how they do it?

I'm pretty sure it's a math problem. Fixed costs aren't a % of income.

That's the same for every program on the Adult Net.

If the site owner has something else more profitable than the pay site then spending
time on the more profitable business makes sense.

That is exactly right. They will steal your money, revamp, redesign and come out again with an all new program and do it again. A company shutting down the affiliate really has no other reason than a cash grab because they realize there will be no repercussions. Their assets are their content, it is just a small price to pay for complete re-design of everything to start fresh. They have a nice mailing list of ready made affiliates to entice to the new program. The cycle begins anew. These fucks need to be outed, named and blacklisted.
I've been burned like a few others on this board from these ripoff programs, they know that individually we aren't going to do anything, but if enough get pissed about it and start fucking them back, it might make some of them think.

I think what seals the deal for these guys is when they lose their processing then get hit with fines and chargebacks that they can't cover.

I am pretty sure at that point Visa and MC or whoever is keeping all the income to cover fees and its in the program's best interest to be broke at that point.

I am sure the churn and burn theory is correct in some cases, but in most, I think legal and financial obligations make it more appealing at that point to just not have any income at all, close up shop and move to a new town.

You know the answer....

They need money and are hurting. When they close an affiliate program the following happens:
1. they stop sending checks, which depending on their hold time it could be 3-4 weeks of affiliate payments they keep.
2. they get to make 100% now on all future rebills.
3. everyone who hadn't reached a min payout loses their money. you would be surprised how much this ads up for some companies.
4. many people don't notice the update and continue to send them traffic.
5. they continue to get a good bit of traffic from the 100000's of sites that were linking to them and some people forget or miss links when they go to swap it out.

It's a big cash infusion for them. Whether the owner needed it to pay his mortgage or loan on his nice sports cars or if they needed it to cover their business expenses. Either way its a bright neon sign that their ship is sinking. It's an exit strategy. When these companies are struggling to stay alive they don't give a fuck about their affiliates and how much their affiliate have made for them over the years. They are worrying about themselves and since they know they are going out of business they figure why continue to pay out when we can keep it.

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.

Depends on the sites also,
Lawyer
Solo Girl Cut or %
Money to the Model for Content
Designer
programmer
Stamps and checks if processor is using other than ccbill
Computers
2257 stuff
advertising
Events (long list here)
and the list goes on.

Sure these are things you can write off on taxes, but remember this means you just don"t have to pay Taxes on that part of the income, not that you Have it in pocket!!!
accountant

the big money is gone, why have the liability?

affiliate managers make 10% WTF ???


That is not relevant because all of those things have to be paid for whether they have an affiliate program or not. That is the cost of doing business.

You should assume the sites have these operating costs already anyway regardless of the affiliate revshare. The affiliate revshare is just an added layer to a healthy program, or else the program can't afford to stay open without affiliates anyway. Your fixed costs exist, and then you share the "extra" sales with your affiliates. If you can't afford to run a 50% program, then you really can't afford to run the program anyway.

Because running a site isn't free. I love all the conspiracy bullshit everyone is posting, blah blah rebills, this that stop sending payments.

When it comes down to it. They might just not be making enough to support the program.

• Hosting
• Content
• Domains
• Support Hours (for customers, affiliates)
• Management Hours (updates etc)
• Payment Gateway
• Affiliate System

Hosting could range from $100 - $1,500/month. Content could be in the same range depending on the quality & amount of updates. Domains could range from $20-$200 a year depending on the size of the network. And support and management hours could be anywhere from 3-5 hours a day, to maybe as little as 3-5 a week. The payment gateway could be anywhere from a % each year to $400 a year. The affiliate software could be free, but if they're using something like NATs - that shit isn't cheap.

Your theory of "why not just switch to revshare and stay open" only works if they are making more than it costs to run the site and keep it open. It seems you left out the major point that it costs money to run and manage a paysite & affiliate network.

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.

Great post. That really puts PPS vs Revshare into perspective.

Simply put they don't make enough joins to cover their monthly operating expenses and/or allow for future content. Profit only exists after a certain amount of $$$$. Until that amount is reached the program loses money.

Well, that isn't true. Affiliate software isn't always free for one. However even if it is just bandwidth. Let's say they have to convert at 1:800 to cover the cost of the bandwidth, but they are converting at 1:4000. They would be loosing money by keeping the affiliate network open.

You've answered your own question by stating it doesn't make financial sense to close the affiliate program if they could still make money off it. Well, obviously they aren't making money off it if they're closing it. Unless you want to get into some retarded debate with GFYers about conspiracy this consporacy that, it really is just that simple.

clueless... if their main reason to close down an affiliate program wasn't to stiff everyone then they would have:
1. Sent out the checks from the current pay period.
2. The would give everyone more than a 1 day notice to pull links.
3. If they couldn't profit on revshare, which is funny, at the worst they could just reduce the payout rate from 50% to 25% on all future rebills. Nope what do they do, they give you a big fuck you, and keep all your money...
conspiracy bullshit??? :Oh crap more like facts.

wtf? bandwidth and domains. do you have any idea how cheap those things are. I can see it now...

Affiliate program: " we have to close our affiliate program and you will not be paid ANYTHING on future rebills because we need the money to help pay for our bandwidth and renew our domains. "

If they can afford to keep the site open, they can afford to run a revshare program if they want to. Which costs no longer exist because of affiliates?

What happens is they keep running it on hope. Hoping some affiliate signs up and saves them, hoping the solution to growth just drops in the lap. So they wait, months pass by, and they wait... then money gets thin, they make cuts and they wait. Then finally one day the programs profits can't cover the expenses... and they close it down, that day/week - because they have no choice.

Correct, it's not conspiracy, it's just bad business practices backed with hope.

50% of the costs are gone instantly because of the Affiliates. Most programs that do this, are simply buying time before they go out of business, but it does buy them time, pays for more hosting, and keeps adding to that hope factor.

The entire business model was predicated on credit card fraud. Without the fraud there are no joins at any price so revshare is not practical as it would not even cover server costs.

That has nothing to do with an affiliate program. If they can't pay their overhead to stay in business with their own traffic then their business is the problem and getting rid of the affiliate program wont help save the business. It will however allow them to stuff their pockets as they walk out the door and put the company on cruise control. They will continue to make rebills and they can let staff go, not buy new content, and run things bare bones.

50% of -what- costs? Only the additional sales, not your existing program or existing sales. That means you are making extra money, not losing money.

How can you not afford to accept visitors loading your tour page? Lets say their hosting bill is $300/mo, they keep $15 of the revshare split, they need to make 20 sales a month, which at 1:4000 is 80,000 visitors, I think a $300 server can afford 80,000 visits..

yeah and so is 100% of the traffic. :2 cents:


well except for the people who miss links or didn't hear the 1 day notice that the company is going to shut down it's affiliate program.

If affiliates take 50%, if you drop them, it means you profit 50% more. And yes, they would be making extra money. But if you're already at the point of going upside down, it doesn't mean you profited 50%, but like 40% and now because they have no affiliates, the traffic/sale decline will hit and that 40% will be eaten up very fast without an equal amount of sales coming in.

If you can't make a profit on a picture and video membership site because you are paying out 50% to an affiliate then your business is the problem and not the affiliate program. If you can't profit from 50% from someone else's traffic good fucking luck going out there and buying your own traffic and trying to profit off of it. The problem is when you BUY traffic you might strike out a lot, it's a risk. You can spend 5K and LOSE money. With an affiliate program they can't lose. They know what the margins are and they don't pay out until they collect the money. The affiliate can lose on the deal but the company always will make 50%. And like I said, if they can't profit off of 50% of the sales then their business and their ability to run it is the problem and getting ride of affiliates is only going to make things worse for them in the long run.

Aye, an inevitable death once they have reached this point... unless they have something else going of course.

What do you profit 50% more on? Residual links that they forgot about maybe, but if they're not sending you traffic anymore then you're not profiting on any of it. Someone else is.

We're still paying 35 pps and having no problems.

Since 1996 baby!

its threads like this that prove why affiliates are affiliates and business owners are business owners.

News flash: Being a 1-man show affiliate is NOT a business. The end.

Please don't piss on my leg and tell me it's raining, okay people?
If a company stops paying it's either because they are going out of business or are trying to keep whatever's left before going out of business. Those programs that shut down and still accept memberships are just screwing people. Simple as that. It's not about PPS vs. Revshare because that business model debate has been going on for years now.

This business - Adult - is riddled with short-term thinking scammers trying to feed their coke/meth habit.

comments like this show the intelligence of program owners and why a lot of them are going out of business.

Most affiliates (at least the successful ones) are not 1 man operations. Personally I have a staff of 2 full time programmers, a designer, and 5-10 full/time part time people that assist me from everything from writing text for sites to doing my accounting to taking care of my servers.

I am a business owner thank you very much. :321GFY

I've also owned my own membership sites, and done just about every other thing imaginable in this industry except be a content shooter.

What if they're running NATs? https://www.toomuchmedia.com/pp_nats-pricing.htm

Your question relies on the following being true.

A. Company is using affiliate software that doesn't cost anything.
B. Traffic / system affiliate uses doesn't create extra overhead.
C. Affiliate system management doesn't create extra overhead.

Point is, that is a few "what ifs" for you to be assuming are true.

Are you a program owner or an affiliate rep? Why do you need to have "Dollarman_" as a prefix for your name? Is it because you're marketing a program to affiliates? Good job, buddy! :thumbsup

Allegedly there was another problem.....

For the above to be true, the program already be very small and unable to sustain itself without affiliates anyway, let alone a large program making good sales.