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How much should you pay for your CPA?

Discussion in 'Email Marketing' started by Digital Oyster, Feb 20, 2015.

  1. Digital Oyster

    Digital Oyster Service Manager Affiliate Manager Service Manager affiliate

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  2. T J Tutor

    T J Tutor Administrator Administrator moderator affiliate

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    First off @Digital Oyster , I am an old car guy. I have managed and owned auto dealerships as a younger guy. I have been to Fords Dealer School and GM's Dealer School. Just wanted to get my full disclosure in their.

    Now, your example is regarding an offline brick and mortar, hardly something anyone in CPA is going to relate to when you are trying to use numbers from the sale of a car. I can tell you this, auto sales departments are not a profit center for new car dealers. Their real profit centers are in the parts and warranty departments. The finance departments used to be big bread winners, but not as much as they once were. You suggest: "So the first question the car company is going to ask themselves is: How much do we make off one sale?" You are wrong, there are stats that dealers use to determine the value of income that averages as the result of selling a specific auto model and what it's income value for them may be over the period of ownership. They also determine, through statistical data collected from all dealers nationwide, how that particular sale (and it's after sale income value) folds into the grand operational income of the dealership itself.

    Examples:

    If the vehicle is an inexpensive sub compact that has only $500 built into the sales margin, it may have a low internal income value beyond the sale profit that went up in smoke during sales negotiations. As well, the vehicle, as a sub compact, doesn't wear out consumables like tires, brakes, belts, and such as frequently as a full sized car. It's the after the sale income that produces the bigger money for dealers and that just doesn't happen as frequently for the cheaper autos as it does with the more expensive and bigger vehicles.

    Your article asks the question "How much should you pay for your CPA". Your article is not 100% clearly defined for Publishers or Advertisers. It's confusing because you make statements that are clearly for the consideration of a Publisher and others are clearly for an Advertiser.

    For Publishers, the value of a lead must exceed the cost of producing the lead and the cost is determined by the distributed operational costs which include ones servers, internet connections, equipment, operational software's, and so much more. It isn't just the traffic expense. I have demonstrated this 100's of times over the years for Newbies that think they are running profitable campaigns until the end of the month rolls around and the other bills come in for the cost of doing business.

    I get the point of your article, but I think it needs work and should include the "cost of doing business" formulas in order for Publishers to determine if there is value in promoting the specific offer and for the Advertisers you should focus more on offers that are not brick and mortar Advertisers and more lead gens associated with the big boxes that would distribute the leads to the brick and mortar (unless local lead gen is what you wanted to begin with). The latter can be a big box like FORD or Chrysler or Mercedes, but not a dealership, only the manufacturer.
     
    seeqer likes this.

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