Very true! average cpc even at 'negotiated rate' still tends to be between 10-20p which is quite a lot.
Its simple to work out if its worth it or not.
Formula I use: (example - use your own figures)
averages sale profit = £5
average conversion rate of your shop visitor - > customer = 4%
cpc = 15p x 100 = £15 / 4 (customers I expect to convert) = £3.75
So in this example its barely worth it, once I've paid £15 for 100 clicks at that rate and processed another 4 orders, total profit £20 I would be £5 richer. The cpc company would probably be making more out of each click than I would.
If your conversion rate is 6% or better and you make at least the average profit above then CPC would work very well and would be a guaranteed route to growth.
I take it you are already using Google Base which is free?
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In addition to the formulas I posted RE converion rates I forgot to say:
Sometimes if the right seller is listed on the right shopping engine, either because they are much cheaper or more unique than the competition the conversion rate of visitors from there can be much, much higher than normally experienced.
If there is a clear and unique reason that visitors would buy from you and you can find a directory on which there is little or no other companies able to compete in your area of products then you would be looking at a very strong opportunity.
The really great thing about successful CPC is that once proven to make money 10 x purchase of clicks will equal 10 x sales, 10 x profits up until you have exhausted the demand for the product on that directory.
I use Adwords to market a service and installation side of our business and the results are so predictable that we can effectively 'buy' a busy month anytime we feel like one.
Sometimes if the right seller is listed on the right shopping engine, either because they are much cheaper or more unique than the competition the conversion rate of visitors from there can be much, much higher than normally experienced.
If there is a clear and unique reason that visitors would buy from you and you can find a directory on which there is little or no other companies able to compete in your area of products then you would be looking at a very strong opportunity.
The really great thing about successful CPC is that once proven to make money 10 x purchase of clicks will equal 10 x sales, 10 x profits up until you have exhausted the demand for the product on that directory.
I use Adwords to market a service and installation side of our business and the results are so predictable that we can effectively 'buy' a busy month anytime we feel like one.
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L
Logan
- Original Poster
- #6
Thanks for the comments, yeap using google base and adwords and the conversion rate is around 8-9% at the moment as i have quite unique products and quite good prices when you compare the market...
At the moment i am looking to generate sales and turnover rather than making high profits , and all my competitors are using these channels and am sure generating sales...
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With that conversion rate so long as GP per order is sufficient the CPC is definitely worth a go. You could find the three most suitable directories and apply a small budget to each. Ultimately moving all funds to the most successful.
I too focus on building turnover ahead of profit, just moving a lot of money gives me tremendous leverage to negotiate cheaper buying in costs, cc processing and delivery packages. So the profit always catches up and we stay competitive
Speaking of which CPC costs can be re-negotiated once your budget becomes significant. Occasionally for this reason it can be good to put 'most' of your eggs in one basket...
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