In a recent article we discussed why the best way to use or provide residential proxies is through a disintermediated proxy network (DPN).
The practical reason is pretty simple: more money in your pocket for both users and providers.
And in this article we’ll be taking a closer look at why traditional residential IP proxy middlemen charge so much. Or in other words, why you can save so much by switching away from them.
We’ll be relying on some excellent 2018 research from a team of academic researchers from various universities around the world. The full text of their paper titles Resident Evil: Understanding Residential IP Proxy as a Dark Service is available here.
The first reason proxy middlemen can charge more is because they… can.
The market for residential proxy providers is relatively young. The researchers suggest that is has begun to develop significantly in the last few years, and the competition has not been that great.
That means if you’re one of the few providers in the space and there aren’t many alternatives, you can charge more. Should be pretty obvious.
The second reason is that proxy middlemen tend to have shady, “pump and dump” style business models.
In case you haven’t noticed, the shadier a business is, the higher its profit margins tend to be.
That’s why the mafia charges higher interest rates for loans than regulated banks :) Think about it. If your business model is at risk of being shut down at any time, you’re going to charge as much as you can while you’re still able to.
And according to these researchers, proxy middlemen are pretty damn shady. Read the full report for the whole story, but here are a couple of the biggest smoking guns:
The majority of proxy middlemen don’t accept volunteer residential IP proxy providers.
Note that here we’re not even talking about paying the providers — just getting their consent.
And so if residential IP providers aren’t volunteering to provide their IPs, then how are the middlemen able to use them? There isn’t a clear answer other than that they are up to no good somehow.
Second, many of the residential IP addresses the proxy middlemen use are from IoT devices.
IoT devices include smart TVs, DVRs, web cameras, etc.
As the researchers note, even a proxy middleman does have a volunteer program, it doesn’t include an option to include a user’s IoT devices. Just their “normal” computer IP address.
That means there is definitely something rotten in the state of proxy middlemen’s business models!
So skip the shady residential IP proxy business models and put money in your pocket with a DPN.
As we explained, disintermediated proxy networks are all about putting residential IP proxy users and providers in direct contact with each other in a fair, transparent way.
Both sides know what they’re doing, how they’re doing it, and how they are profiting from it.
And that, of course, is how Hprox works. Our business model is built to last on a foundation of transparency and honesty. Make the switch and your bottom line will thank you!