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  1. #1
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    October 27th, 2011
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    Realistic converstion rate? Will my idea work?
    I just started a website that sorts T-shirts from alot of stores and make them searchable. I have affiliate agreements with all the stores.

    In avarage they pay me 4$ for one T-shirt sale ($20).
    I pay around 0,2$ for each visitor from AdWord.
    This means that for break even every 20:th visitor have to buy one shirt. This means a converstion rate of 5% (seems high?).

    On the other hand imagine that every 60th visitor buys 3 shirts (to get more value out of the shipping). Then the converstion rate is 1,67% (more realistic?)

    My website idéa aside, what do you think of the margins? Is this doable or should I stop waisting my time?

    Give me an esstimate, could this be profitable with an optimized site and right usage of AdWords?

    Thank you

  2. #2
    ABW Ambassador
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    November 25th, 2005
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    639
    Welcome to ABW SimonUH.

    Conversion rates are hard to estimate into the future. There are so many factors that go into whether or not traffic clicks on your PPC ad, is quality traffic, likes your website, likes your creatives enough to click on them, feels comfortable with the hop to the merchant site, like the merchant site, finds what they are looking for and finally makes it to the end of the shopping cart, and after all that - does not cancel/return the order.

    Until you have some historical data to work from I would recommend being far less optomistic when estimating my conversion rates. I have some very targeted landing pages that I have worked on for years and they are lucky to see 2% to 3% conversion rate.
    When the only tool you have is a hammer - everything looks like a nail.

  3. #3
    Newbie
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    October 27th, 2011
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    Thanks for the answer, Dave.

    I understand that conversion rates are very hard to predict, and you that you have to work hard to get decent once.

    What I'm trying to figure out is if the affilite deal I have is good enough to build a site for. I don't have any previous traffic, so I would have to start from scratch.

    I truly belive there is a demand for the service I would provide (not just a meningless bridge site).

    However I would have to be sure that my intakes can cover the advertising. If I can profit or not, that's another story.

    If anyone have some input that can help me with the decision I'm happy to listen. Perhaps someone that dealt with clothing products in this price range?

  4. #4
    OPM and Moderator Chuck Hamrick's Avatar
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    April 5th, 2005
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    Park City Utah
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    16,646
    Simon a 5% conversion rate for a merchant is considered good. To give you perspective Amazon does 17-18% a year and is considered the pinnacle.

    An affiliate site is more of a hobby endeavor while you are trying to make a living at it. Its a labor of love and shouldn't milk your family savings account. As long as you are not pouring tons of money into it and are enjoying the time spend building you are on the right track. If you intend to spend money on paid search once built then set a limit and run tests.

  5. #5
    ABW Ambassador superCool's Avatar
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    April 23rd, 2008
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    you might be able to get your click costs down by refining your keywords. if your keywords are very general (like "t-shirt") the cost will probably be higher than if you use specific keywords (like "superman t-shirt" or "cheap superman t-shirt"). some people have thousands of keywords in their campaign. once you get some clicks you will get a better idea of what people are really searching for, then you can add more keywords. focused keywords will also help your conversion rate - assuming the landing page is also focused.

    good luck

  6. #6
    Newbie
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    October 27th, 2011
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    Quote Originally Posted by Chuck Hamrick View Post
    Simon a 5% conversion rate for a merchant is considered good. To give you perspective Amazon does 17-18% a year and is considered the pinnacle.

    An affiliate site is more of a hobby endeavor while you are trying to make a living at it. Its a labor of love and shouldn't milk your family savings account. As long as you are not pouring tons of money into it and are enjoying the time spend building you are on the right track. If you intend to spend money on paid search once built then set a limit and run tests.
    Good advice! And just to be clear, I didn't say I HAD 5 %, onlythat I NEED 5 % conversion to break even if that 5% buy ONE t-shirt.


    Quote Originally Posted by superCool View Post
    you might be able to get your click costs down by refining your keywords. if your keywords are very general (like "t-shirt") the cost will probably be higher than if you use specific keywords (like "superman t-shirt" or "cheap superman t-shirt"). some people have thousands of keywords in their campaign. once you get some clicks you will get a better idea of what people are really searching for, then you can add more keywords. focused keywords will also help your conversion rate - assuming the landing page is also focused.

    good luck
    I'm experimenting with keywords now to lower my cost, but it's hard to even get down to 0,2$. Do you know any guide with more specific strategies for AdWord? The usal tips are everywhere: divide into adgroups with relevant keyword, description, title, link and landing page.

    I'm looking for abit more of out of the box advice, how to find those low price keywords that still have a fair chance of conversion.

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