aeiouy - 12:36 am on Aug 28, 2006 (gmt 0)

Honestly how many of those clicks that you are charged for are real potential customers.

What difference does it make? It is all ROI. My point was I might end up making 5x the money as someone who is not participating in PPC.

Not necessarily. what you are saying is that it would cost 66% to gain 33% and of that generally 20-30% is to cover operating costs, employees, taxes and general overhead. So .. worst case you're really only making 3%.

You are nit-picking the example I used for the sake of clarity. Make the numbers whatever you want. The point still stands you can potentially use PPC in addition to other avenues to increase your sales volume AND your profitability. Some industries would kill for a 3% profit on their business. If I make 10% less than you per item, and sell twice as much, I win! :) It is about profitability. Your gross margin is only one component to profitability.

Haven't seen an ecommerce company make it long term that wasn't making at minimum 25% profit from each sale (after marketing costs).

PPC advertising is a marketing cost. I am not sure if you are counting it as something else. So is buying links or running a website with other features on it to draw traffic. It is all marketing.