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---- Kissing off PPC and glad for it

trinorthlighting - 8:57 pm on Dec 2, 2009 (gmt 0)

Look at your click through rates, but you have to equate that to dollars.

Here is a simple formula you can use:

Cost per click X Average clicks needed to convert a sale = Total cost of converting a single sale

Profit from a sale - Total cost of converting a sale = True Profit

So let's say you have a 1% conversion rate (which is average) for every \$1 you spend in a click means you need to have \$100 of profit in the item you are selling just to break even.

Not many people who bid at least \$1 have a \$100 profit in the items they are selling. We applied this formula across the board and we found we were tripping over dollars to make pennies in profit.

We do look at time to time at bid prices, but bidding prices from PPC never seem to go down and always seem to trend upwards. I doubt we will ever go back and we will continue to invest money into expansion of product lines and increasing organic traffic.