How much does a Tipster service make – Dailyprofit.com.au Case study
I’m a huge fan of transparency. That’s why this blog shows my exact betting figures down to the last cent. I also follow some big time bloggers who share their earnings each month on their blogs. There is a heap of secrecy and dodginess in the tipster industry (and gambling in general), so I thought I’d be the first to change that and reveal the figures from my own service. Who knows the size of the tipping industry? I would say that well over 50% of the money made from this industry is done by crooks (people selling lies, faking results, so on). I would actually put that figure closer to 90% to be honest. Of the 10% who are honest (in regards to record keeping), about 0.1% of those would actually make customers a long term profit.
So if there are 100,000 tipsters, 10,000 are semi legit and 10 of them might be profitable long term. That is a very hard needle to find in a very big haystack.
I’ve now been following tipster services for 5 and a half long years. Over that time, the number of long term profitable tipsters I have found can be counted on one hand, and that hand can lose four fingers in a hunting accident and still count them all. There are some shooting stars that perform well for a year or two, but eventually they all burn out and give all the profits back and leave behind some angry punters. The edge bookmakers have is not an easy thing to beat, if it was we would all be millionaires.
How did Dailyprofit start?
At the start of 2014 I wanted to see if I could generate some revenue from this blog. I knew I could plaster the blog with advertising and make 6 figures a year from affiliates, but I also knew how bookies treated customers and I couldn’t advertise something I knew was dodgy. At the end of the day we all still need to sign up to bookies and I have cost myself a heap of profit from my stance, but I am happy with it (but my stance can and will change when the right affiliates or sponsors come along).
So I didn’t want to use affiliates, but I wanted to make some money so I could continue to write more. I’d had the idea for a course to teach students all I knew about betting and that received a great response. My main goal was to create something that would help my readers make money from their betting. I actually did plan out the entire course and one day will get around to making it, but it will be a premium product for readers who are really serious about their betting. I then thought the quickest way to help readers make money was to literally tell them what to bet on. I knew that taking advantage of the Aussie bookies bonuses was a guaranteed way to make money and I knew there was one tipster who was so good that value was still left on the table even after the pros bet his plays.
So after years of researching and testing hundreds of tipsters, I decided to create my own tipster service. I knew I could create something better then everything else out there and knew I could make my members a long term profit. It was a win win. I make a profit from a business and members make a profit from their betting. That’s how Dailyprofit came into existence. I was lucky enough to find Josh who had started a bonus based service and also worked out a licensing deal with Jonno from Sportpunter.
We launched in July of 2014 and 2015 was our first full year in business. Now let’s delve into the numbers.
Set up costs
Online businesses are so cheap to set up these days. All you need is a website, some hosting and a logo. Let’s break down the costs of running a website for a year.
- Domain name: $10
- Hosting (I’ve got the top of the line hosting now): $500
- Email software: $480
- Membership software: $197 one off
- WordPress Theme: $69 one off
- Logo: Free (we had a friend design it for free access to our service)
Total cost to set up the site was $276
Total yearly cost to run the site: $990
To have a top of the line fully fledged membership site only costs $1,000 per year. You could do it on the cheap and pay $100 a year.
This is one reason why there are so many scam sites out there. It costs literally nothing to set up a website these days.
This is the real reason you are reading this article. You want to know exactly how much we made in 2015. From subscriptions alone we made $136,763.00. This is purely the money paid to us and does not include paypal fees, refunds, referral bonuses, accountant fees, GST, so on.
That is a pretty amazing figure for a 1 year old business. You will notice a huge jump in July, that was because we offered members a 15% discount if they bought a 1 year subscription.
Also note that I personally don’t get all that money. After paying Josh and Jonno, I take home about 45% of the profit. But also take tax out of that and we are looking at about 30% of that going to me. I make and lose more per week from my betting then I get paid per year from the service.
I could go into churn rate, LTV and CTA but that would bore most of you. In a nutshell we have had about 600 people sign up to the site and usually sit on around 250-280 members each month. It is also a cyclical business as we get a heap of customers coming in Febuary and March for the AFL season and leaving 6 months later. The Value and Risk free members usually stay around for 12 months before they have learnt enough and been banned from a few bookies. The November-January period is usually the slowest and with the upcoming changes to the IGA (Interactive Gambling Act) and the changes in NSW, it could kill off that part of the service.
As with anything new, we make mistakes and learn as we go. I’ve made a ton of mistakes with the Dailyprofit service. Many have been rectified but some still need fixing.
My first mistake was pricing. I priced the service way too low to begin with. It is still priced way under what it should be but changes are coming. I also grandfather in members, so the price they signed up with is the price they will pay until they decide to quit.
My profit goal is to make $200,000 profit from the site each year (netting me $60-$80k). Instead of aiming for 500 members at $35 per month, I should have aimed for 170 members paying $99 per month. With fewer members I can spend more time helping each one.
The other mistake I made was not setting up the Sportpunter portfolio properly. I knew that the strongest models were the AFL, NRL, NFL and S15. While I believed the MLB, NBA and NHL models would produce a small profit, I knew they were not worth the time and effort for most members. My reasoning for keeping these models in was twofold, members kept requesting them and if they were not there then there would be no Sportpunter models for 3 months of the year. Members prefer a set monthly subscription instead of a yearly cost for each sport. This issue will be rectified this year.
Staking per sport was another mistake I made and I am always trying to improve the balance of the portfolio. While a healthy profit has been made for members, more can be done to increase it.
The final mistake I have made is not setting expectations well enough. There are documents on the site, but some members must not read them. I try and let members know this is a long term venture. But I still get members signing up and leaving after a bad run. They expect profits to be made every month and don’t understand that betting does not work that way. I try my best to teach members, but to be honest, I don’t want members who have unrealistic expectations when it comes to profiting from betting.
There is always room for improvement and the service will continue to get better each year.
Other revenue streams
There is one way many other tipsters use to make more from their customers. That is via affiliates. By getting their customers to sign up to bookies under their account they make 30-40% of any profits the bookies make from you per month. I am strongly against this and feel that any tipster who does this should be steered clear off.
We have a stance against using affiliates on our site unless we know members will not be limited in their betting. That rules out advertising almost all Australian bookmakers. We have done deals with 2 small fully aussie owned books where we know we can get special deals for our members. Dailyprofit has affiliate deals in place with Topbetta and Madbookie. In total we have made under $2,000 from Topbetta and $0 from our affiliate deal with Madbookie. But these deals have enabled our members to make thousands in bonuses.
You need to be wary of tipsters who get you to sign up via their affiliate links. They are double dipping, making you pay a subscription fee, and also taking losses they generate from you. Never join a tipster who’s incentives are not aligned with yours (i.e: if you win, they make no extra profit).
If the tipster is truly profitable then using affiliates makes no sense at all. It will only cause issues for members. If a profitable tipster did use affiliates and kept costing a bookmaker money, the bookmaker has a list right there of people using that service and with one click can ban or limit them all.
Dodgy Affiliate based tipster service example
I’ll break down how these guys make money. They create a website, falsify figures and get you to sign up to their service. Let’s say you are paying $50 per month. They get you to sign up to each bookie they are going to recommend bets at.
Let’s assume this tipster is just like the rest of them and will have winning and losing months, but over a year will lose you around 5% on turnover. We will also assume there are 50 bets per month and you bet $100 per bet. Over a year you will have bet $60,000 and lost 5% on that turnover ($3,000), you have also paid the tipsters $50 * 12 = $600. So you have lost $3,600 over a year.
The tipster has made $600 directly from you. But also much more from your losses. As we know with betting, some months you will win and some you will lose. Let’s say on average you lost 5% on turnover each month. You are betting $5,000 a month and losing $250. This dodgy tipster is getting at least 30% of that loss back from the bookmaker. So he is making an extra $75 a month from you. 75 x 12 is an extra $900 a year. His total profit from you per year is now $1,500 and you have lost $3,600.
Get 100 suckers (i mean customers) following the service and he is making $150,000 a year. But it does not end there. Eventually you will quit following his service and maybe move onto another one. This first dodgy tipster still earns money on all your future losses. He continues to make profit year after year from you until you stop betting. It’s a perfect con.
How has the Dailyprofit service performed?
To the right is the total profit and loss figures since the service started. Members profits are based on a number of things.
- When they joined
- how long they can keep accounts open
- their staking
- what service and specific models they follow
- effort put in (finding best odds, keep accounts bonus eligible)
I just wrapped up my yearly survey for the service and profit and loss figures ranged from -$2,000 to +33,000. I will be doing a yearly review of the service soon. But you can download our results on the website and look through every single bet we advised.
Dailyprofit is still just a small service. As no other tipster has ever released figures, I have no idea if we are doing well or poorly in regards to members. Over the past year a number of other tipsters have slipped up and sent emails to their full list and you could see all their members (extremely unprofessional). Some tipsters speak a big game, but they all had very small lists. So I believe we are doing very well. But I am never happy and want Dailyprofit to become the best, most profitable, well known and trusted tipster site in the world.
So far I have never had to advertise the service. Membership has grown by people finding this blog and then joining the service and by word of mouth. We have paid out a heap of referral bonuses to members. We will start testing some advertising in 2016 to see if we can build out our member base quicker. Once we get to our desired number of subscribers we will simply close the service and have a one out one in policy.
Without giving too much away. Competitors are already trying to copy us ( I will crush them 🙂 ). There will be new services tested and added. But we will make sure they are profitable for all members before going forward with them. We will be testing Soccer, In-Play betting, Horse racing, partnerships and a few other things in 2016. Anything that can add profits for members will be rolled out.
2016 is going to be an exciting time for Dailyprofit members.
The reason we have made so much from our service is because we generate so much value. In the current survey of members, we had 80 members put in their profit and loss figures and it was just short of $500,000.00. Half a million taken from the bookies by just 80 members. I have no doubt that since inception, the site has taken well over $2 – $3 million from the bookies. We love our members and make sure they are given every chance to make long term profits.
We will continue to make members a profit and teach them all about betting. What more can you ask for then a service that keeps you interested in games each week and at the end of each year you make a decent profit? Get on board now, as prices will be jumping significantly when the AFL season starts.