The average conversion rates I'm familiar with (in just about any given industry) seem to hover between 1-2 percent. When I look at an Adwords equation where I pay $0.25 per click, my numbers (see below) say that I'd need to bring in no less than $25 compensation on every conversion.
Sure, the $45 Ebay registration looks good. But what about all the other affiliate programs that pay 5-10 percent? If my $0.25 link to Amazon pays me only 5 percent commissions, a customer would have to
spend $500 to make it worth my while to run the ad. That doesn't seem likely at Amazon.
Am I missing something here?
Assume 1,000 clicks/day with average CPC of $0.25
1000 x $0.25 = $250 net cost Google AdWords
Apply conversion rate of 2% to this traffic:
1000 x .02 = 20 buyers
Average commission needed to break even:
$250(net cost) / 20 = $12.50
Average commission needed to make a reasonable profit (100% markup)
$12.50 x 2 = $25
a) decent commission
b) high conversion rates (ad copy helps here reduce bad clicks).
Someone else might give you more clues but I'm not going to!
Good luck.
Pete
Ive seen $50.00+ commissions @ .05 per click.
If you make 10 USD per customer and you have a CVR of 1.5 % you may spend up to .14 USD per click to make a profit and .15 USD to break even.
The best way is to find something to promote, build a list of keywords, start a campaign, and try to make a sale.
Track Track Track!
Set a small daily budget, and invest at least $10 bucks, even $20. Then see how it goes from there.
KG
I guess the big question is what constitutes a "decent" commission? And are any of you really seeing conversion rates significantly above 2 percent?
And is the Google AdWord game mostly about high-ticket items? Like $500 and up?
Questions, questions. Thanks
When you say my time would be better spent building a content-rich website, are you talking about focusing my efforts on SERPs rather than the paid ads?
I tried the content links, matched my affiliate links and products to the content on my site, had good traffic and nothing from the affiliate links.
Do people really buy after hitting affiliate links? or is the trick to skip the content altogether and use AdWords to pass the buyer directly to the item?
I think the direct-to-merchant model is sort of a topic in itself---and as Fischerle mentioned, the landscape for this type of business has changed dramatically with Google's new Adwords rules.
Besides, I imagine I'd rather try my hand at building my own content sites anyway, where I could have more control of the look and feel of landing pages.
well I'm not an expert.. but I think here are some ideas that might work... if you are a beginner.
first, using cj as an example, I use cj because you know if they have a green bar or $ amounts it means their website converts...
second, if it converts try to look at the merchant's specific product see which one converts really well... I would recommend that you don't go for the top ones.. simply because there's probably a few dozen others promoting it, making it a little expensive to try.. but you can still do it if you want.
third, while looking for the second best or third best products, see if they give you high commission rate, if it's $10, your max bid should only be 5 cents so 100clicks 1 sale, 100% ROI... if commission is $20, your max bid can be 10 cents, so again 100clicks 1 sale still 100% ROI.. but I would typically go for products that sell under 50 clicks.. that's something you can grow well.. if it takes 110 clicks to sell one and you get only 20% roi.. I think those in my mind should probably be cut.. spend time on high converting products..
fourth, check if the keywords related to the product have a lot of competition, if it's very few and there is good traffic, that's a good start. but if you see a a very high traffic, be careful, you might get burned.. anyways you can use google or overture's traffic estimators.
fifth, then write a compelling ad, value, value and value for the customer... then set your daily max to at least double cost of 100 clicks... or 1.5x is probably ok... so it won't slow down...
try to avoid ppcing to sites like amazon(in general those with short cookies and big names)... because there's a lot of people that don't buy the first time... you lose those... if you can create your own brand in this case your own website the better.. so if people comeback they comeback to your site and if they buy, you can always refresh the cookie that will give you the commissions.
anyways, here's a quick number for you it's not that good but you know... at least it works... one of my campaigns sold 4 items today.. with about 300clicks... and i think around 100% roi... some days.. I'm break even.. but at the end of the month so far I've ended up with a little more than 100% roi..
I really appreciate your thoughts...I'm fairly new to this, so I'll have to read your post over a few times to make it sink in.
I'm still a little puzzled about the seemingly high commission dollar amounts people mention in this forum. In your example, you mention $10 commissions. When I look at Amazon's rate schedule (5-7 percent) this tells me that Amazon customers would have to spend somewhere around $200 for you to make the $10. Is it fair to say that the Adwords program just isn't cost-effective for products under a certain price point?
And in regard to Ebay, I have to assume it's the registration commission of $45 (not the rate schedule of $0.10 - $0.25 per bid) that inspires anyone to bother joining their affiliate program. Is anyone really making money from $0.10 commissions? What happens when everyone in the world is registered at Ebay--will the party be over?
You are right, it is not easy and not a slam dunk. Finding the right merchant, commission, bid price, product line, and ad copy is key. Many will not work. I've hit on one very good one, but bailed out on a few others that just didn't make it due to too low commissions, too much competition or too low conversion rate.
I think it is safe to say you won't make it trying to sell books with Amazon or iPods with Apple or MP3 players or digital cameras. Find a niche - if there are any left.
It's just like gambling except its easier to lose your money.
So keep looking for new merchants, nothing is forever as they say... And as somebody said earlier on in the thread, the CJ EPCs and green bars for merchants are a very good indicator of who to try promoting. Although these figures can be massaged; you do get a good idea of who to AVOID at least, such as the $0.80 EPC non-converting bozos.
>>>>>>
And in regard to Ebay, I have to assume it's the registration commission of $45 (not the rate schedule of $0.10 - $0.25 per bid) that inspires anyone to bother joining their affiliate program. Is anyone really making money from $0.10 commissions? What happens when everyone in the world is registered at Ebay--will the party be over?
>>>>>>>
The CJ tools you mentioned sound helpful, though.
And in regard to Ebay, I have to assume it's the registration commission of $45 (not the rate schedule of $0.10 - $0.25 per bid) that inspires anyone to bother joining their affiliate program. Is anyone really making money from $0.10 commissions? What happens when everyone in the world is registered at Ebay--will the party be over?
I don't think there is really anyone who will target the $0.10-$0.25 per bid. But the registration commission of $45 is also only if you got 7500 registrants per month. So eBay has really become a volume game. After this new Google affiliate policy, it is the high volume players who bid high and have taken up the sole spot for eBay making it much tougher for the smaller players.
You've got to speculate to accumulate on Adwords... at least when starting a campaign.
The payoff at top tier sure looks attractive ($337k/month), but way out of my league. That must have been one crazy, intense market before Google pulled the plug last month.
Here are some of the discussions within WW on ebay.
[webmasterworld.com...]
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I am not sure that the direction in which this thread is going, that it is more relevant in the Affiliate forum.
$10 or even $100 commissions are avail through CJ, but not for selling products. These are found in lead gen programs (financial, edu, etc).
Problem is none of these will accept a white bar affiliate. You need to generate some commission first for a few months with the lower paying programs (possibly at a break-even or loss) to earn your way into the better programs.
When I look at Amazon's rate schedule (5-7 percent) this tells me that Amazon customers would have to spend somewhere around $200 for you to make the $10. Is it fair to say that the Adwords program just isn't cost-effective for products under a certain price point?
Amazon sells a lot of items other than books and they sell for hundreds, sometimes thousands of dollars. Do your research and work out who would buy these expensive items over the Internet. Target them.
Lead generation is where the big bucks lie sure, but to play with the big boys you have to be prepared to pay big bucks chasing them.
Lead generation is where the big bucks lie sure, but to play with the big boys you have to be prepared to pay big bucks chasing them.
There's big bucks in pay per sale, too. Virtually everything I do is pay per sale. I find it much easier to find people looking for a specific product than to find people willing to fill out a form, apply for a credit card, etc.
MovingOnUp, my best program is pay per sale, but not through CJ. Pays 30%. Encouraging to hear that you have found it easy to generate product-based traffic.
Point is for keyon: there are high commission programs. Expand your search beyong fixed percent commission to different payment structures.
Main point: you don't get into the best programs from the start. Be prepared to establish a sales history on CJ first, perhaps at a loss.
I found it easiest to do this with a high volume, low payout program (for example earning 50 cents to $1 per action, EPC near $5 but I could send hundreds of clicks each day through Adwords) -- something that lets you generate $30 to $50 per day in commissions. Keep it steady for a couple months to get some green bars. Then approach the higher EPC programs.
