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Start Your Own CPA Network in 4 Easy Steps

Discussion in 'Making Money' started by bryanon, Mar 22, 2013.

  1. bryanon

    bryanon Executive VIP Premium Member

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    I wrote up this piece a while ago and posted it on another forum. But since there seems to be an increasing interest here towards opening up CPA (or PPD - essentially the same thing) networks and the majority seem to believe that pretty much anyone can do it, I decided to re-write it a bit and post it on BHW.

    So here goes ..

    If you thought that this thread would actually give you a 4-step system to starting your own CPA network, then I'm afraid you're wrong. What I am going to give you though is 4 very good reasons why most of us shouldn't even CONSIDER opening a new network - be it a traditional CPA network, a PPD network or something else.

    1. As with any business, you need a specific (and good) USP to succeed. While there's definitely some people who do have a USP, can differentiate themselves from their competitors and actually offer something new and attractive, the sad truth is that the vast majority of people looking to launch a network are exactly the opposite - and simply want to replicate the other 1000+ networks out there. This does NOT work.

    2. Even worse than the point above, many people (especially over here on BHW) tend to come up with the WRONG kind of USPs. I've already heard from at least 5 people how they see the need for a "tolerant" CPA network, i.e. one that would accept most affiliates and would be happy with blackhat traffic - because after all there's a lot of demand and very few network around that cater to this demand. But there's a very good reason why networks don't do it - there's been a ton of "blackhat-friendly" networks around, and almost all of them have died in a matter of months, simply because the fact that the network is happy with this kind of (fraudulent) traffic doesn't mean that the advertisers are - and what happens a few months down the line is that the network simply won't have any offers left, and will get a ton of negative feedback because they can't pay their affiliates (due to their advertisers not paying them). So simply seeing demand for something doesn't automatically make a business idea feasible.

    3. Contrary to popular belief, running a CPA network takes A LOT of (upfront) cash. Most wannabie network owners out there think that they can easily start their networks with a few grand of upfront cash by only paying their affiliates once they get paid from their advertisers. This is very far from the reality however. Even if you leave marketing expenses aside (let's say you're a marketing wiz and can get all the publishers you need through word-of-mouth marketing), most CPA networks out there, even the small-ish ones, float HUNDREDS OF THOUSANDS to millions of dollars. This is because, while the small guys are perfectly happy getting paid NET-30, I can guarantee that you won't find a single super-affiliate who would be happy with anything longer than weekly NET-3 payments. And this means that YOU will need to pay them weekly, while your advertisers still pay you monthly (yeah, you can just broker all your offers from another network that pays you out weekly and not run into this issue but then let's turn back to the USP part - you NEED to deal with several networks/advertisers, some of whom won't pay you weekly - or there would be no reason why a publisher would promote offers through your network rather than the one you're getting offers from). By the way - there's another popular myth out there about advertisers favouring networks to publishers and giving them better payout terms. This is entirely wrong as well - networks often get paid even NET-60 (!), literally meaning that they will have to float whatever their affiliates make for 2 months. Do you have this kind of cash lying around?

    4. Perhaps one of the most important things is providing your affiliates with offers that they can promote. As I briefly mentioned above, most new networks that start these days (and go tits up in a matter of months of course) tend to broker offers from other networks - and this is another thing that simply doesn't work, unless you're already big or have some other competitive edge. Not only will you not get any serious affiliates (because serious affiliates would go directly to the network you're "borrowing" offers from), but often enough even medium affiliates don't want anything to do with you, simply because they can get better payouts for the same offers than those that you can provide. To clarify - NO network will give you a considerable pay bump based on projections - they want to see traffic first - but in order for you (your affiliates) to generate traffic, you will already have to offer better rates. And needless to say, approaching advertisers directly and getting actual, exclusive offers, takes a whole lot more than a few days of work and a few hundred bucks.

    To sum it up, the fact that you can get a Hasoffers network up and running for $500 does not mean that you can get your network started (let alone generating revenue) for this amount. If you're actually interested in starting a CPA network then you will have to understand that it's a business that takes months (or more) of planning and a lot of upfront cash.

    Take care,
    Bryan
     
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  2. abhi007

    abhi007 Jr. VIP Jr. VIP

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    this is absolutely spot on info. many people tell what do you need i am launching a new CPA network with direct offers lol that makes me laugh, and still most of the members here fall for that shit just because it is recommended by some reputed BHW member.
     
  3. ferma231

    ferma231 Elite Member

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    To start network you should have about $xx.xxx - $xxx.xxx
     
  4. marketinggenius

    marketinggenius Newbie

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    Very thoughtful. However, ultimately useless. Business is simple: JUST DO IT! And solve any problems along the ways. The world is not perfect, your business plan is your mental masturbation. Nobody know how much it will cost to from 1 Starbucks to a gillion Starbucks now.
     
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  5. xtopzi

    xtopzi Regular Member

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    The point that the OP is trying to make is that many people think way too lightly about starting their own CPA network.
    If you've carefully built your business plan for a CPA network and everything seems bright as the sky then ofcourse, go for it.

    Not useless at all, thanks for the post.
     
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  6. antichrist

    antichrist Jr. VIP Jr. VIP

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    Thanks and rep for true information that would keep a lot of the shit networks off the net if people followed these words of wisdom.
     
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  7. molabee

    molabee Junior Member

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    Its not an easy task to start a CPA network.
     
  8. watley

    watley Power Member

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    Thanks for your valuable insight.
     
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  9. bryanon

    bryanon Executive VIP Premium Member

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    Exactly. And these principles don't apply only to CPA networks - in fact they apply for most businesses. Sure, there are businesses that be established with a zero investment. I've done it myself in the past so I would know. But in most cases that's not the case. Would you go and open a cafe if you had barely enough money for your first rent and nothing left over to order supplies or pay your employees? I doubt. The issue with many online businesses (such as CPA networks) is that the barrier of entry is SEEMINGLY low, whereas in reality it isn't. And this is why you get tons of people jumping on the bandwagon and spending not only a bunch of time but often their last cash only to realise a couple of months down the line that the venture was destined for failure from the very beginning.

    I'm not trying to discourage anybody from opening a business, all I'm trying to do is combat the (quite popular) "do first, think second" mindset.
     
  10. shahnewazrahmani

    shahnewazrahmani Newbie

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    bryanon

    Thanks for your good post. Can you tell me which kind of software, script can i use or good developer to build a cpa website like ******* ?

    Please tell me.
     
  11. Asif WILSON Khan

    Asif WILSON Khan Executive VIP Premium Member

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    No1: You bumped an old thread. On this occasion I won't get pissed as I missed it before.
    No2: Did you read the thread? He is advising against taking your course of action.
     
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  12. Asif WILSON Khan

    Asif WILSON Khan Executive VIP Premium Member

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    Precisely the reason so many small businesses fail.

    http://bit.ly/QcZFFn

    There seem to be 3 types of people (over generalising but making a point, percentages are my own guesstimate):

    1. (80%) Those that don't like risk.
    They are too afraid to start their own business and won't step outside their comfort zone.

    2. (15%) The "JUST DO IT!" brigade.
    They will start something without the proper planning and preparation.
    They will try numerous opportunities and will switch from one to the other without seeing a project to the end.
    They will continually fail because they haven't laid the foundation to success.
    They won't mind though because they are "just doing it"

    3. (5%) True Entrepreneurs and Business people spend time working on their business plan (back of an envelope is fine, as long as you do have a PLAN)
    They research their market.
    They identify the gaps and fill them. They offer something new or aim to become the best in their field.



     
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