Feb 15 2008

Profit Margins

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A lot of people asked me about my profit margins. More specifically what my profit was when I hit my $3,000 day.

Generally my profit margins run slightly under 50%.

I'm very aggressive with how I bid. I like to push the limits to see what my traffic volumes can get. If I can take a lesser profit margin but in the end make more money due to volume, I'll do it. (Duh)

Again, affiliate marketing is all about testing. Find what is best. Sure I can make 1000% returns (And I have) but my sales were around $102 for spending $10. That's no way to make money. Fast forward to now, I spent maybe $200 to make $400+ with that campaign. So, yea I made less profit margin, but I'd much rather have $200 bucks than $92 bucks.

A lot of my money campaigns run at about 33-50% profit. I find this number to be pretty consistent with most high hitting campaigns unless you've found a really hot converter.

Hope that helps!

~Jonathan Volk

  • (7) Comments. Got a say in it?


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7 Responses to “Profit Margins”

  1. Marc says:

    I hate to destroy your calculations Jonathan. But spending $200 to make $400+ is not 50% ROI, it’s 100%. If you’re aiming for 50% you spend $200 and make $300, so you have $100 as profit. =) A lot of people get this wrong.

  2. Teach Me $$ says:

    Hi Jon,
    That is a very impressive ROI rate and Marc said it right, I use this formula to remember the roi if my money gets double it is 100% ROI.

    Looking forward to how you improve your conversion rates.

    Vijay

  3. Tim says:

    He is talking about Profit Margin, not ROI.

  4. Thats pretty good at the volume level your are pushing, nice job. Lol I missed out, I thought u wouldn’t be posting while you were gone so I wasn’t sure to check in our not, but looks like you are doing AM in India! Even Better :)

    Warmly,
    Wes

  5. anon says:

    He stated a few days ago he prepared 10 posts that will update automatically while he is traveling.

    “Dont Worry:

    I have been working hard to prepare 10 posts which are responses to the best questions asked in the Ask me a Question post. I’ve written fairly detailed posts which will be posted each day at Midnight.

    I will be able to get in contact as I will have internet access there.”

  6. Marc says:

    Profit margin is ROI…? Pure Profit is another scale unit and always lower than ROI because you already substracted costs & stuff from this number… Don’t wan’t to be a smartass here, but I think it’s important to be exact with these units :]

  7. Chuck says:

    Profit margin and ROI are different ways to measure your returns. A 50% profit margin is a 100% ROI. He’s talking about profit margins. Mine typically run between 65 – 75% depending upon the month/season. My offer is relatively seasonal. I would like to risk it and push the bids higher as well knowing that my margin will fall. There’s a point where increasing bid doesn’t improve your margins. you just have to test to see.

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