This is how I see it.
You thought that Adwords direct to merchant was going to be easy money?
You thought that it was just a case of picking a merchant, send them some traffic and the sales would pile up?
Please correct me if I'm wrong.
Affiliates that make good money doing the Adwords - Merchant thing have been doing it for ages. They have researched their markets and tested, tested, tested. They have all probably lost a fair amount of money during this testing.
From your figures you should be getting 1000 clicks per day on Adwords?
You should really be getting at least 1% conversions (bad!) unless you picked a really high ticket item that just isn't going to sell or have chosen a market that is difficult to sell ie items that are directed at people that have no means of purchasing online.(you need a credit card to buy stuff on the web) It seems to me that you may need to re-think your campaign. You need to test and test and you will lose money until you find that thing that converts.
Let me just say, if you have found an Adwords keyword that is costing less than 5c per click you are either very lucky or nobody is bidding on that term because it doesn't convert! It seems that after 1000 clicks and 0 conversions the latter might be the case.
If you are new to the affiliate game I would recommend building actual websites around the things you want to sell and use Adwords to get people to your site for the oft mentioned 'pre sell'. You may stand more of a chance of converting sales that way.
You want inspiration - I was making between 4000 and 8000 dollars a month off 10 websites with 10 pages each before I quit. I know, I know, that's peanuts compared to some folk ;oP They were all silly little niches but each site made $10 or so per day all from organic SE results. Adwords would have been cheap but I never bothered because it was easier to get the sites ranking back in them days.
Don't think - Expensive Watches or Pianos or Diamonds or Insurance or Credit Cards.
Think - Bonsai Trees or Umbrellas or Kitchen Dustbins or No Smoking signs.
You get the idea
Best of luck