How much should I pay per click

What is the formula I should I use

[newborn]

Ok what is the formula to use I am looking on
Google saying A 5% CTR and use a 1% conversion rate.

Ok my products costs USD$9.99 after charges USD$9.30
Now If I spend US$.10 PC I will get to the top however say I get 1000 clicks = US$100.00 a conversion rate of 1% = 10 x 9.30 = How do I fix this problem.
-Improve Conversion rate is seemingly the only option here but how do I do this?

[Pengi]

Improve Conversion rate is seemingly the only option here but how do I do this?

Improve how you describe and "sell" your product on your site.

Put some detail in your Adwords ads to help stop people from clicking if they are not looking for what you sell.

State your price. Identify the product.

Buy Widgets Here
Round Blue Widgets For Sale
$9.99 each plus P & P
Your URL

[edited by: Pengi at 4:33 pm (utc) on Nov. 26, 2006]

[newborn]

Can I tell you I do that now and am really trying to see what makes sense, however sometimes when I search for the keyword Im active for it but I dont see my ad all the time, though my budget is in the thousands...Stress as Google keeps moving the Bar..
I have
1000 Blue Widgets
Download 1000 Blue widgets For
Just USD$9.99 Blue, Green etc
www.uknowwidgets.com

I dont know what else to do here.

[Pengi]

You could try moving into a different market ;)

Improve or ad to your site (and product range) maybe get some organic traffic.

Try separate pages and ads for each type of widget - try to get so specific that each ad links to a page specific to each type of widget you want - and the ad describes and prices this widget - why would anyone click on your ad if they didn't want to buy?

Then again - maybe your widgets are the wrong shape or cost too much. It may be that you can't make money just using Adwords to sell your widgets.

[Hiccup]

If your conversion rate is 1%, then it takes 100 clicks to get 1 sale. What ROI are you looking for? Let's use 100%, (for every dollar you invest, you want a dollar in profit.) So, (I'm assuming you make $9.30 total per sale), you can spend ($9.30/2=$4.65) for one sale. 100 clicks/$4.65 expense = $0.21 per click. That's the max cpc you can use to achieve 100% ROI.

How do you improve your conversion rate? There are several methods to use, improve your ad copy, improve your landing page, improve your product and several others. I think you're looking at just adding more keywords to your campaign though. It's all a matter of finding the nuggets of gold.