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Getting Paid: AVS vs. Pay Site, Part 3

Getting Paid: AVS vs. Pay Site, Part 3

June 1, 2002
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" I must stress that your first site should never be a pay site, since you will not yet understand the process of developing and manipulating traffic... "

In my previous installment, I examined many different factors affecting a Webmaster's choice of whether to build a pay site, or an AVS site, and discussed some of the pros and cons of each. Now I'll wrap things up with a few more considerations, and see if there is a 'magic formula' to determine which approach is right for profiting from YOUR site.

Why I Have Not Usually Recommended Pay Sites
Traditionally, I have eschewed the development of new pay sites as an unnecessary burden on an already over-saturated marketplace littered with 'the ghosts of pay sites past.' Especially for newbies that believed their first site should be a 'mega' pay site going head to head with the likes of Cybererotica, and attempting to do so without a thought as to the costs of such an endeavor, or the sources of traffic required to feed it, starting a pay site was a recipe for certain failure.

Far preferable was the development of softcore free sites that fed traffic to a sponsor's pay site. This would provide the referring Webmaster with a substantial return on his or her investment without the headaches or expenses of running a pay site. I advised those who wished to feature hardcore content to build AVS sites as a means of providing themselves with a degree of legal protection; a topic we've already examined.

Nowadays, however, much is made of the glut of free porn, to which one response I can offer is "then stop giving it away!" This leaves you with two main options: running an AVS site or pay site. Since I do not find AVS sites as attractive as I once did, perhaps we should take another look at building a small pay site. Once again, though, I must stress that your first site should never be a pay site, since you will not yet understand the process of developing and manipulating traffic — which is the single most important factor for success.

Another Factor for You to Consider:
Until now, I have focused on the use of 3d party billing processors to handle your membership transactions. While having your own merchant account and using the services of a company like NetBilling will save you money, the risks of using your own merchant account for processing adult site memberships outweigh the benefits, for new pay site owners especially, and I would really not recommend this as an option for you to consider. If your business was the selling of tangible items rather than site subscription services, or if you had extensive pay site operations experience, then my advice might very well be different, but for the vast majority of new pay site operations, a 3d party billing processor like ibill makes more sense.

The reason for this is that most 3d party processors have the experience necessary to deal with charge backs, and the clout to handle the vagaries of the credit card's issuing banks. If you were to lose your 'merchant status' (the ability to accept credit cards as payment), especially over excessive charge backs, then you will NEVER get it back, and this could have several serious consequences further down the road for you. 3d party processors do provide a layer of protection for you, and with their added options of providing customer service and password management, the 15% of sales they will typically cost you is a small price to pay. Multi-site access is still a powerful motivator for many prospects, though.

Consider also that you could use both approaches. In the case of our amateur pay site, ibill can be used to process membership transactions, while our own merchant account can be used to process video tape, DVD, and 'personal item' sales, adding an additional 10% or more to our bottom line on these select items. With proof of delivery receipts provided by the shipper, there is no disputing of the product's ordering or delivery, which dramatically reduces charge backs which often occur as a result of a member's wife seeing the credit card statement, and when asked, the member prefers to lie, saying, "No dear!, I didn't join a porn site, they must have stolen our credit card number somehow!" Having that signed receipt makes the lie impossible:

So Which is Best, Using an AVS or 3d Party Processor?
This is really up to the individual needs of the site in question, so a blanket answer is not really applicable. Traffic from the AVS' directory is not what it used to be in my opinion, eliminating one of the major reasons that I chose to use AVS systems in the first place. The other reasons (a degree of perceived legal protection and a multiple site selling point) remain, but the first is moot by the fact that pay site's perform a similar test — although check and Web900 type transactions are further complications to the age verification issue, and this is not isolated to pay sites; since AVS memberships can also be purchased in this way.

This leaves the multiple site selling point, which is perhaps not the same attractor that it once was, either. This might be because savvy surfers have realized that much Web marketing is hype and bullshit, and a site that promises "access to a million other sites for free" may not be viewed as very trustworthy or legitimate, despite the voracity of the offer. Multi-site access is still a powerful motivator for many prospects, though.

I still believe however that the less experienced a Webmaster is, the more likely his or her success will be by starting with an AVS site before going with a pay site, and depending on the circumstances, both, or at least two different doorways into the same site; one pay, one AVS, might be the best option. One way to work this would be to trap exit traffic from the pay site's join page and offer the option of access through an AVS membership with the added incentive of 'bonus' access to a zillion other sites as well — a win-win situation that could make a dramatic 'bottom-line' difference for many Webmasters!

The choice of whether to build an AVS site or a pay site is not as clear-cut to me as it once was, and this article illustrates some of the benefits as well as the drawbacks of each. In our ever-changing environment, it behooves us to stay flexible and evaluate our options based on what works best for us today rather than what worked best for us yesterday. Consider your own site, and the ideas presented here, and then make the best choice for YOU and your own situation. ~ Good luck! ~ Stephen


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