Take a look at this picture since I'll do my research based on this :
Considering that the Member 1 has only his 1st tier of downline and one of his 2 referrals
has made a second purchase (3 sales in total from 2 refs) earning him : $45 * 0.3 = $13.5
Member 1 will have earned : $36.5 + $0.04 + $13.5 = $50.04
The site will have earned : $15 x 4 = $60 of which after paying the member it makes $60 - $50.04 = $9.96 pure profit.Let's now add the 2nd Tier :
Member 1 will have earned : $36.5 + (6 x $0.02) + ($45 x 0.3) = $36.5 + $0.12 + $13.5 = $50.12
Member 2 will have earned : $36.5 + (2 x $0.02) + ($45 x 0.3) = $36.5 + $0.04 + $13.5 = $50.04
Member 3 will have earned : $36.5 + (2 x $0.02) + ($45 x 0.3) = $36.5 + $0.04 + $13.5 = $50.04
The site will have earned : $15 x 10 = $150 but will have to pay $150.18 so it is beginning to lose stability after 2 tiers.Let's add the 3rd Tier to see how worse it can get :
Member 1 will have earned : $36.5 + (12x $0.02) + ($45 x 0.3) = $36.5 + $0.12 + $13.5 = $50.24
Member 2 will have earned : $36.5 + (6 x $0.02) + ($45 x 0.3) = $36.5 + $0.12 + $13.5 = $50.12
Member 3 will have earned : $36.5 + (6 x $0.02) + ($45 x 0.3) = $36.5 + $0.12 + $13.5 = $50.12
Member 4 will have earned : $36.5 + (2 x $0.02) + ($45 x 0.3) = $36.5 + $0.04 + $13.5 = $50.04
Member 5 will have earned : $36.5 + (2 x $0.02) + ($45 x 0.3) = $36.5 + $0.04 + $13.5 = $50.04
Member 6 will have earned : $36.5 + (2 x $0.02) + ($45 x 0.3) = $36.5 + $0.04 + $13.5 = $50.04
Member 7 will have earned : $36.5 + (2 x $0.02) + ($45 x 0.3) = $36.5 + $0.04 + $13.5 = $50.04
The site will have collected 22 x $15 = $330 but will have to pay 350.64 so it's not so stable..Adding more levels will make it even less stable in the long term..
However every failure to advertisers to generate all required sales within a year will lead to more profits
for the site, since members will have to make new purchases to re-gain the advertiser status.
From what I see the instability is caused by the $0.10 daily bonus they offer to advertisers.
Also buying bigger packages does not make things worse because the percentage earned for
the upline is still 30% so no instability is caused by that. It actually benefits the site, since
a less amount of sales will help less members reach the cashout requirement. And also the
advertisers that join the site without an upline will benefit the site too.
I personally feel that it won't be an issue because for more than 90% of internet marketers
it will be very difficult to generate sales through their direct refs. A lot of people will just join
un-referred to purchase advertising and won't promote at all.. So I think in overall Rogue did
a good job here.
The chance of failure seems to be small enough..
What do you guys think?