For example, if...
1) Your product sells for: $27
2) Your sales conversion rate is: 2%
3) Your traffic cost per site visitor is: $1.00
4) Your refund rate is: 5%
What will your PROFIT be?
In this case, for every 100 visitors you send to your sales page, you will LOSE $49.
Furthermore, I didn't even take into account PayPal (or other merchant account) fees, or any fixed costs such as page design or copywriting.
In addition, to keep things simple, this example assumes that you don't have any affiliates. (But, often, affiliates want to know that a product will convert well before they jump on board in a big way.)
OK, the good news is, now that we have forecast the loss, you can work to see what you can change to improve that result.
For example, if you:
* Raise your price somewhat.
* Improve your conversion rate (perhaps with better sales copy or a better bonus).
* Reduce your traffic cost (maybe by split-testing your ads).
* And reduce your refund rate (by addressing some of the concerns your refunders may have had)...
... your result can suddenly change for the better.
Using these numbers...
1) Your product sells for: $37
2) Your sales conversion rate is: 3%
3) Your traffic cost per site visitor is: $ .75
4) Your refund rate is: 3%
If you sent 100 visitors to your sales page, your PROFIT would now be $33.
In a nutshell, to profit online, you need to drive traffic to your page and convert it.
Therefore, you must...
* Have a good product that is in demand.
* Have an effective sales letter.
* Make your offer attractive.
* Test your traffic sources.
* Remember to monetize your back-end.
KNOW YOUR NUMBERS.