I am looking into starting an E-commerce store and am looking to see if PPC is a valid form of advertising. Is PPC advertising viable for an E-commerce store that has a small profit per customer. I am trying to work this out. Looking at some keywords on adwords keyword tool, bids are in the region of £1.00 for most of the keywords i would wan't to bid on. If I estimate that out of 100 clicks 5% will actually become a paying customer, and on average each customer will give us a profit of say £5.00, I would have to spend £100 to get 5 X £5.00 = £25.00?! Is this right? am i working this out wrong? I would have to lower my bid price to £0.25 to just break even. And what would that give me? Is there anything im overlooking or is it just fact that adwords are only for the big boys that have large average sale per customer, or markets that have high priced goods. I just can't understand why similar businesses in this same niche would still pay £1.00 for these customers, coz they are - or is it to do with building a 'list' and repeat customers? Any advice would be greatly welcomed.
From my little knowledge i have...i would suggest that you bid taking the worst case scenario into consideration...like for suppose.....you calculate as if 100 clicks gets u a sale....there are many other pro's in here who can come up with better suggestions..cheers