Buy a Paid-To-Click?

After just 5 months, PandaProfits is on the auction block. An email from Tom Wacker today reports they are out of money. Does this news suggest an opportunity to buy a Paid-To-Click?

PandaProfits was one I jumped into and began promoting immediately because I know and respect this team: Janelle Pineau, Patrick Griffin, Tom Wacker, and Bill Gorcsi. They’ve all got loads of experience (most recently working with the TimTech crew at Click-Track-Profit), though PandaProfits was their first foray into Paid-To-Click.

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Now and then I’ve thought about buying a troubled PTC to see if I can turn it around and make it profitable. Over the past two years I’ve seen several decent PTCs heading for the rocky shoals. Hitzza. EveBux. Paidverts. And most recently CashNHits. Would I buy them? No — up until fairly recently my own “Amazing Tale” PTC business hadn’t turned the corner on profit though I was continuing to spend money.

GETTING TO NET PROFIT

But I reached net profit at the end of year two and am now taking cashouts about every 5 days or so. (See “Net Positive Year Three.”) Achieving net profit was my most important objective. Now that I’ve done that, I am slowly building up my capital, while continuing to spend on the program. That’s a great place to be, because I no longer have to sink new money into the venture.

So far I have been reinvesting some of that capital –that net profit — back into the business. I’ll spend about half of it to continue my ongoing advertising campaigns. The rest is accumulating. It hasn’t amounted to a big pile of cash yet, but it keeps growing a little more each week. I expect it would take a significant ongoing investment to buy a Paid-To-Click, but it is an attractive next step.

BUY A PAID-TO-CLICK?

Should I get serious about buying an existing PTC? PandaProfits has over 5,000 members. That’s a tiny membership compared to most other PTCs but a respectable growth rate for it’s first 5 months.

What do I need to know about PandaProfits before I decide to make an offer?

Well certainly I need a complete financial picture. What’s it’s cashflow situation? How much money is coming in each week or each month? Where is the money coming from? What are members spending on upgrades and advertising?

What are the ongoing expenses? What are the overhead costs? What is the current ad spending?

I’d need a complete spending picture — how much the PandaProfits team started with, how much they anticipated spending during the first year or two, and what their actual expenditures have been during these past 5 months.

Businesses that follow standard accounting practices can easily produce these essential details. Income and expenses show up in a Profit and Loss statement. Total money invested and money taken out of the business show up in a Balance Sheet statement. I’d want to see these standard business statements before making an offer.

I have no experience operating a PTC, so I’d need to learn what the day-to-day responsibilities entail. I currently spend about 3-5 hours on my “Amazing Tale” business, and a lot more time on my Oakley Studio managed web hosting business. So I need to be sure I have the time, as well as the money.

ON THE RECORD

I sent Tom Wacker an email asking for some of these inital financial details on the PandaProfits PTC business. But I also made clear that everything I learn is “on the record,” as is everything I do since I started my “Amazing Tale“ venture almost 1000 days ago. If they don’t want the financials regarding the inner workings of their PTC to be made public, then they won’t answer my questions and I won’t be in a position to buy a Paid-To-Click.

On the other hand, if they are willing to work with me — a potential buyer — then you will have the inside track on how these sites work from the inside, and I’ll be happy to share what I learn with all my followers. I may also become the new owner of a fledgling PTC.