$SALE / ( ConversionRate x PPC CostPerClick )
which means nothing else than what the actual PPC costs are for one conversion - taking into account the ConversionRate as well as CostPerClick.
The conversion rate and the CPC can of course vary, but we can take some conservative average numbers. Let's assume we have a conversion rate 1:60 and a CPC of $0.37
In this example this would mean a COST (!) of $22.20 per Conversion.
(Note that this does NOT take into account potential refunds)
Using such a formula it becomes clear that is basically IM "suicide" to promote a product off clickbank which makes $20/sale....where the cost per Conversion (Sale) is $22.20!
If we want only 100% profit, that is: We spend X on PPC, and we want to make X x 2 back...so we want to promote a product which PAYS twice as much as we spend. <--- ultra simple math
Clickbank right now has 8297 active unique products (i just checked on cbengine.com which i use a lot recently)
However, from the 8297 active unique products on clickbank only 249 pay more than $50/Sale! Only 3% of all clickbank products which could yield you 100% profit. That is, again, not taking refunds etc. into account.
Where and How to tweak?
Well of course...you have some choices:
) You sell those few products which pay more
) You get lower CPC
) You get higher conversion rate
All in all, i used typical numbers...and i am just saying that PPC and CB is NOT as easy as some people (especially vendors) claim!
Especally getting good conversion rates proves to be tough, and getting lower CPC needs you need to do very good keyword research. The $0.37CPC are also some typical average, and not even on the "low" end. I see people bidding up to three times this amount in certain mainstream niches which means big big PROFITS. (For Google <----