Traffic * Click Trough Rate (CTR) = Traffic to Merchant SiteWrite this down.
Traffic to Merchant * Merchant's Conversion Rate (CVrate) = Nb Affiliate sales
Nb of Affiliate Sales * (Product's price * Commission Amount) = Total Affiliate sales
Now, let me give you a concrete example:
Let's say that you have a website with 3000 monthly visitors,and that 10% of the people who visit your site click on your affiliate link and land on your merchant's site.
You'll get:
Traffic * Click Trough Rate (CTR) = Traffic to Merchant Site 3000* 10% = 300. That means that you send 300 visitors per month to the merchant's site. Then, let's say that the merchant's conversion rate is 2%.You'll get:
Traffic to Merchant * Merchant's Conversion Rate (CVrate) = Nb Affiliate sales 300 * 2% = 6 Affiliate sales And finally, if the product costs $45 and you get 75%.You'll get:
Nb of Affiliate Sales * (Product's price * Commission Amount) = Total Affiliate sales 6 * ($45 * 75%) = $202.50 That means that for 3000 visitors per month, you will make $202.50 with this site.Just build 5 sites like this one, and you'll earn $1,012.50 per month.
Why is it important for you to know this formula? The answer is: because you will be able to know how much you will make whenever you create a new affiliate marketing site.
But what is even more important is that you will be able to IMPROVE your marketing efforts and INCREASE your sales. In other words, you are now able to write your own paycheck!
Whenever you want to make more money, all you need is to increase one of these metrics.
You can improve the following:
- Traffic (Add more traffic strategies) As an example, instead of getting 3000 visitors, you can get 4000 visitors per month.
- CTR (Learn how to create better converting pages) You can manage to get a CTR of 15%.
- Your Commissions (Choose another product) You can choose a higher priced product.