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Tips for newbies to determine Max CPC.

Discussion in 'General Entrepreneur Discussion' started by Z5 FILMS, Aug 17, 2007.

  1. Z5 FILMS
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    Z5 FILMS Contributor

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    A little tip of the day I found to determine your max CPC...

    If merchant x pays 10% commission, has an average basket size of $50 and a conversion rate of 2.0% This means that for every 100 clicks you send to them you should earn $10. You should initially use this data to determine your maximum CPC. In this case, a max cpc of .05 cents would yield a profit of $5.00 per hundred clicks. A max cpc of $.07 would yield $3.00, and $.10 would break even.
    Use the formula below to work out how a merchant’s commission structure should determine your cost per click strategy: -

    Avg Basket Size x Avg Conversion rate = Avg Sales Per Hundred Clicks x Affiliate Commission = Avg Earnings Per Hundred Clicks
     

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