PPC Analysis
Let us assume you are selling a product worth $20 and your profit margins, excluding ppc advertisers and their costs, are 25%. Let us say you bid $2 on a keyword, and received 2,000 visitors out of which 100 actually purchased your product. This means that you have spent $4,000 (2,000 visitors × $2) to generate $2,000 (100 buyers × $20) worth of sales (out of which your profit is $500). This amounts to a loss of $3500 - a bad move any which way you look at it. So, bid on keywords that fit within your budget and work well within your product's price tag. Remember, on an average, only 2-5% of visitors will get converted into customers.