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Product sales statistic - calculation


How to calculate conversion rate for product

Conversion rate and EarnedPerClick (EPC) are two most important factors when you are testing products on web site

What we need to calculate this?

  • Number of unique clicks (from live visitors).
  • Number of sales
  • Total earned sum for that product

Every affiliate network can provide some kind of statistics, but if SE spiders are following affiliate links, clicks statistics cannot be accurate.


Clean clicks

Clicks from spiders, robots, duplicate hits must be excluded. If you are using some kind of redirection, use robots.txt and exclude directory where is your redirection script. On that way, web robots will not follow affiliate links.

Clicks can be taken from affiliate network statistics, and they are mostly counting unique clicks. But, robots clicks are added too, and that is inflating number of clicks.

So, for accurate clicks statistics, you need to:
- block SE spiders from affiliate link using redirection, script
  is in directory which is excluded from spidering, using robots.txt
- Analyzing web site logs, other web robots can be spotted,
  they are not requesting pictures visiting web pages, duplicate
  hits from the same IP can be excluded too.

Doing this above, you can filter unwanted clicks and get real number of clicks to affiliate link.


Number of sales

This can be a problem due to cookies life. Some visitors will not buy on first visit, cookie remains on their computer, and sale can appear days or even months after click. What we need is to take minimum of 1000 clicks and number of sales in that time frame to get near accurate statistics.


Product conversion rate

Now, if we have a filtered number of clicks, number of sales and earned sum from those sales, we can start to calculate.

Conversion rate (percent)= (100/number of clicks) * number of sales

EPC (earned per click)= Total earned/number of clicks

Example No1: 1000 clicks, 10 sales, affiliate commission is $100
Using above calculations, Conversion is 1%, and EPC is $1

$1 per click is still good EPC, and we can be sure that our affiliate link is good targeted, even when conversion ratio is low. Nothing strange, if commission is $100, 10% of product price, that means product price is $1000. That is high priced product and it is very hard to get that kind of visitors.

Now, take reasonable priced product, say that price is $50 and commission again 10%

Example No2: 1000 clicks, 10 sales, affiliate commission $5
Conversion is 1%, EPC $0.05

Here we have low conversion and low EPC. Product in example No2 needs improvement. $50 price is not too much, and many visitors can afford to spend $50 to get product. Replace with similar product (lower price) or target visitors better.

For sales, average conversion should be 3-6%, for Leads 20%, if product is good and visitors targeted. However, conversion depends of product price too, for expensive product you can expect lower conversion, but high EPC. EPC below 0.05 shows bad choice of product. Promote AdSense ads instead.

However, more is better.

Sometimes, there are affiliate programs paying for lead (CPA) and for a sale, using one network for sale and another for Lead.
Test both if you can. Sometimes, depending of various factors, Lead EPC can be higher then sale EPC.


Commission Junction EPC

Just in case if you are confused with those "high" EPC in CJ reports.
Commission Junction (CJ) EPC has to be divided by 100 to get real EPC (earned per click). Let's see real example - for one product, CJ report shows EPC of $64.29, and calculation (earned $/clicks) shows that real EPC here is $0.64.
What could mean that average CJ EPC shown for merchants (advertisers) is not, for example, $5.00, real average EPC is then $0.05. What further means that CJ EPC is displayed in - cents.


Affiliate networks and average EPC

Average high EPC shown near some product/offer (offers list) can show you only that offer is converting, what doesn't mean that will convert for you. Use that as guidelines only, more important is to promote product to targeted audience, in that case your EPC will be high.


PPC and EPC

If you want to promote product using PPC (PayPerClick) search engines, just short simple example of calculation:
Say that product commission is $50, and your CPC (CostPerClick)is $0.50. Here you need to get only one sale per 100 clicks (100*0.5=50)to cover expense, or 1% conversion rate.

Sure, everyone wants to earn, what means min. two sales/100 clicks are acceptable (EPC $1, CR 2%).


EPC - site visitor

Some affiliates are playing with this, taking total number of site visitors and total sum earned from site, calculating how much they are earned from one visitor. That can get you an overall picture, but more important is to boost page CTR, calculating page displays and clicks on affiliate link on that page. That can help you to, tweaking page, get more (targeted) clicks on affiliate link.




Don't forget to visit our Recommended e-books for beginners page.



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