How can you possibly profit on Amazon items < $100?

Amazon

[One_on_One]

Ok, I am new to Adwords, but I want to see if I understand this right.

If I plug a $75 item off Amazon where I get 6% commission, I would make $4.50 per sale. A reasonable conversion rate is about 2% so $4.50 * 2% = $0.09.

So, NINE CENTS is my click value. That bid value won't rank high at all on adwords!

Am I missing something?

[Frequent]

Yes you are,

For one thing ad placement on Google Adwords isn't solely determined by bid amount. Secondly, the only people who will tell you this is easy are the ones selling e-books.

Freq---

[One_on_One]

Obviously CTR factors into ad placement, but you'd have to take quite a bit of losses in the beginning to build that up....never said this was easy.

BTW, I'm not some complete newbie who thinks he can get rich quick...I run several websites, use datafeeds, etc. and make about $20/day on the side plus work at home doing web dev for another company. Not making a lot, but I'm pretty damn good at PHP/HTML and know how the game works so don't think I'm just trying to get rich without working for it.

[Frequent]

Absolutely CTR is a big factor. And yes, you can expect to spend more than you make when you start out in order to build a competitive CTR. You also need to keep in mind that the recent affiliate rule changes are really going to make it difficult for you since you are competing with about a million other "bigriver" affiliates for -1- ad spot.

Didn't mean to imply that you actually said this should be easy. Just the tone of your post showed that you probably haven't done much research yet.

Glad to hear you have the drive. You should be up to speed in no time.

Freq---

[bird]

Targetting is the key. Only move in narrow niches where the competition doesn't drive the cpc through the roof. If you select highly targeted keywords (and usually lots of negative keywords) for such a niche, then your conversion rate will move up as well.

Other than that, you'll just have to accept that the system works better for expensive items.

[cagey1]

In general, there are three factors that affect your profitability:

1) High Conversion
2) High Commission
3) High Sales Price

If you can get all three, you will make a lot of money.
If you get two out of three, you will probably make money.
If you can only get one of three, you might make money.
If you get zero out of three, try something else.