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The merchant has excellent copy on his website and the product is good (has great reviews). Is 1% conversion rate too optimistic?
If you're just getting general search engine traffic, yeah, 1% might be realistic.
If your traffic is coming from a PPC campaign, you should get a higher conversion rate because it's more targetted traffic. If you don't, change your ad or dump the campaign! :)
If the traffic is coming from somewhere like PriceGrabber or Shopping.com, then you should have even higher conversion rates. The customer should know what you've got, and what you charge, so the conversion rates should be very high (maybe 40%?)