Does anyone that uses adwords actually make a lot of sales off of adwords? I get some clicks from it, but never any sales from it.
I think it depends largely on the types of products or services you offer. I think AdWords is great if you're advertising services that could get you repeat business, or if you're selling numerous products. I've had some success on that front. If you're just trying to sell a single product, though, I've found it hard to convert into sales. That's just my limited experience, however. I haven't been at the Adwords game for too long. One thing is sure, though. You can burn through money quickly!
If it was as simple as putting up a campaign, getting clicks, and getting conversions of the bat; then everyone would be millionaires. There ARE affiliate marketers that make over $10,000 PROFIT daily from adwords. How so? By testing. Figure out different variations of your landing pages, split test; and sooner or later you'll hit something profitable.
You just need to keep checking various products. Which products actually sell, and which do not. With a quality score of 8+ for your landing page, you pay much less than what your competitors are paying, even for very competitive keywords like web hosting..You need to split test your landing page to get a high quality score. Another thing is the niche. You need to keep testing your adword campaigns for various niches. The niche for which you are profiting, you should stick to it and increase your investment on it...
One of my companies turns over £30,000 per month with AdWords so yes you can make money. I advise AdWords clients they should be making 5 to 10 times their spend on AdWords to get a decent return. However I've tried affiliate marketing, and really don't have the dedication to perfect it to the level you need. In my opinion all small businesses should sign up affiliates as their AdWords campaigns will be more effective that way ;-)
Yes, I agree that testing is crucial. I've been testing content network ads only to find out if those cheap clicks are effective for broad keywords/phrases. hubpages.com/hub/Cheap-And-Effective-Clicks-on-Google-AdWords
Testing and Tracking is very important. Even I friends with adwords for 1 month only, it now earn me ~$50/day, it is small but it prove adwords work.