QUOTE(headystuff @ Feb 11 2006, 02:06 PM) [snapback]1179487[/snapback]
Interesting article:
Recently AutoSurt Systems have had a lot of bad press because normal people who are not into the Internet marketing world have said due to sheer ignorance that the systems are Pozi schemes that cannot hope to pay what they promise.
The Fact is, they are WRONG. Here is how we can afford to pay.
One of the main problems with a return on investment (ROI) calculation is that it does not tell us how the returns are produced. Nor does it tell us what the economies of scale are in the enterprise to which the initial capital was invested. Further, it tells us nothing about the capital intensiveness of the enterprise. All this information is necessary to understand the "how and why" of the ROI percentage. This is probably what has lead to the recent debates across the world determining that auto surfs surely must be a Pyramid scam or Ponzi when in actual fact they are not at all that.
One of the factors that greatly influence the "how and why" of the ROI is what I will call the Knowledge and Entrepreneurial Factor (KEF for short). What this basically means is that a great deal depends on what the custodian of capital does with it and the leverage that's used in its deployment. Keep in mind that many variables fit within the "entrepreneurial" factor.
If I gave $1,000 to an average Joe, he might just go and waste it on garbage he'll buy in Walmart or Best Buy. Another person might put it in the bank and earn 2% interest annually. Another person might take it and make over $1 million with it in 5 months.
This is exactly what an 18 year old kid in the UK did with his pixel marketing website.
The return on this young entrepreneur's investment is an astounding 100,000% in just 5 months. That's an average of 666% return per day. Is this an unusual circumstance? No. Large ROI's are made all the time in the business world. You just don't always hear about it.
If a wholesaler buys a product for $100 and retails it to an end user for $200 within a few days, he has produced a 100% return in a short time. Thousands of these kinds of transactions occur on ebay every single day. And you rarely hear anyone crying: SCAM.
These high returns are produced because the wholesaler employs greater leverage and has better market knowledge than the end retail buyer. Arbitrage opportunities in the financial and business world are where some the biggest ROIs are produced.
One of the things the internet has done is dramatically reduce the capital overhead for many types of businesses, thus increasing their ROI. To illustrate this, consider Dell Computer. Almost 100% of Dell's sales occur on the internet or by phone order. If Dell were selling their computers through storefront locations across the globe, their economies of scale would be far less efficient and subsequently their capital ROI would be lower.
The internet has allowed the average person to start and run a business from their home and make a fortune. Huge returns on investment are possible. This is where the KEF factor comes in. The stronger the KEF, the higher the returns will be.
A Dean from Brigham Young University in Utah has stated: "no true economic investment can hope to return 44% in 12 days...."
If you read between the lines, the good Dean is really saying the following: "I have personally never produced a 44% return in 12 days on any funds I have invested, thus it is highly unlikely that it can be done." He is pointing the finger at his own inability.
To be fair, there IS an element of truth to what he is saying. If a manufacturing company were to invest tens of millions of dollars in a new plant, the company would be very happy with a 5% return in the first few years. Generally speaking, the more capital intensive an enterprise is, the lower the ROI will be from that investment. If the Dean were speaking of industrial enterprises only, he would be correct.
Because many internet enterprises, particularly along the lines of internet marketing, require such a low capital investment and a virtually unlimited sales potential across the globe, ROIs can be absolutely staggering and blow ones mind. With regard to the sales volume, THAT is where the KEF factor again kicks in.
A legitimately run auto surf enterprise requires very little capital investment. All you need is good server and database hardware, and support, technical, and development staff. The low overhead is precisely what has enabled the rash of scams to enter this market and thus devalue the product of a legitimate auto surf.
Compare an auto surf to a capital intensive television network. Capital wise, its like night and day. The typical TV network employs thousands of people and owns/operates/leases billions of dollars of equipment and infrastructure. Many of the employees are high priced actors.
The commonality of an auto surf website and a TV network's airtime is that its value is directly proportional to the audience it has. The more viewers that watch a particular TV network, the more valuable its ad space becomes. Similarly, the more members and traffic that visit an auto surf website, the more valuable its ad space becomes. The reasons people watch TV are the same they visit an auto surf site: they both offer the visitor a value for their time. It does not matter what the characteristics of the values offered are. Whets important is that the visitor desires it.
Add to that the limitless source of revenues that an auto surf can obtain. Sources can include affiliate commissions, strategic partnerships, promotions, and different kinds and levels of advertising. There are likely other sources that neither you or I can even imagine at present. All this revenue with relatively low capital investment. The ROIs for an auto surf will far exceed that of a TV network with huge overhead. The capital savings of an auto surf can be shared with the members of the site in the same way marketing and distribution savings are revenue shared with customers of an MLM company.
One of the bugaboos I have heard is that if auto surf is so good, then everyone will eventually catch on and do it, thereby saturating the market. What an absurdity! The very same thing was said about Multi Level Marketing companies years ago. Yet in the roughly 30 years since Amway started the revolution, the market is no where near saturated and is currently a Trillion dollar industry.
MLM is also an industry that has been targeted by the critics and labelled ponzi/pyramid schemes, the same way auto surfs are today. There is truth to the matter in that many mlm and auto surf operations ARE ponzi/pyramids. That doesn't make it true for all of them.
I am optimistic that auto surfs will not disappear from the market, and that the authorities will let them continue in the same way they have let the MLM industry continue.
So the burning question remains: What is a "legitimate" or "realistic" Return on Investment? In my view, there is absolutely no concrete answer to that. It depends on many variables.
The average person judges what's "realistic" by what they view as the so called "norm". They see their bank offering 2% a year, or the average return of a mutual fund being x%.
Or perhaps they see a frenzy of idiots buying and bidding up the price of stocks of company's that have no hope to ever turning a profit. (a 20% rise in stock prices and they think they are investors and getting rich). Perhaps this is one of the reasons why the "average" person loses money in their investments, works for 30 years and retires below the poverty line. Again, the all powerful KEF determines the outcome.
This article, in my opinion is absolutely amazing. I love it. Not necessarily because it legitimizes the autosurf Industry or because it answers any hidden questions about the Autosurf Industry but because it generally answers why people are successful in any business. People wonder how and why I do not have a "real" job. I'm 26 and my parents still think I'm crazy. Everyone does in fact. People just don't understand how easy money can be to make and how much ROI you can create from good ideas, persistance and a good plan. I look at a blank CD as money... I pulled out 100 blank CD's and sat them on my desk and my girlfriend asked, why did you get those out? I told her that since we lost so much money in 12DP, AT and a few other Autosurfs - not to mention the $1,000+ StormPay siphoned from my account from Xbox 360 Wholesale Info that we needed to make a lot of money fast. I can take a .25 cent CD and make $49.75 profit - EASY.
Thank you for whoever wrote this article.
Welcome to the REAL world of Internet Business and Entrepreneurship.
ing SP!!!
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