I get asked this question quite a bit, so I thought I would make a simple guide to give you an idea of what sort of traffic you need from various methods to make $1000 per month from IM.
Obviously this is subjective and other factors can increase or reduce monthly earnings, but I hope it gives you an idea of the sort of traffic you need to generate to make an income from internet marketing.
Assumptions
- I am assuming that your traffic is highly targeted, either via buyer intent Google searches (SEO or CPC), social media or other means.
- It is not bot traffic or low quality traffic.
- My real world examples are based on T1 country traffic, mostly UK, US & Canada.
Amazon Affiliate Sites
I am starting with the Amazon affiliate programme as I have been building these sites for a number of years and have expounded the simplicity of this method in numerous posts.
However, given the recent reduction in sales commission, read Amazon shafting us, how much buying intent traffic do you need to make $1000 per month?
Firstly, you need to understand the formula we would use to determine required traffic.
$1000 / (Average product price * Amazon commission % * affiliate link CTR * conversion rate)
Lets break that down to make it a little easier to understand.
- Average product price: You can get this from the Amazon affiliate reports, or if you have not started with a new niche yet, you will have worked this out as part of your planning.
- Amazon commission %: You can find the UK here and the US here.
- Affiliate link CTR: The click through rate is worked out with the below formula.
(Amazon link clicks / total page views) * 100
- Conversion rate (CR): You can get this from the Amazon affiliate reports, or if you have not started with a new niche yet, you will have worked this out as part of your planning.
Real world example
Theres nothing like a real world example to take the dull out of formulas, so lets look at one of my sites which sends traffic to Amazon UK.
Niche: Home
Average product price: $21
Amazon commission: 5%
CTR: 20.03%
Conversion Rate: 10.79%
This translates in to the below formula.
1,000 / (21 * 5% * 11.78% * 20.03%)
So how many page views do I need to make $1000?
Plug that in to Excel and I need 40,363 page views per month to earn $1000 from that site.
Currently, that site makes an average of $775 per month for me, so obviously I am not hitting my traffic targets as yet.
How does it look in the US with the new low commissions?
Niche: Auto
Average product price: $320
Amazon commission: 3%
CTR: 11.14%
Conversion Rate: 8.67%
This translates in to the below formula.
1,000 / (320 * 3% * 8.67% * 11.14%)
So how many page views do I need to make $1000?
Plug that in to Excel and I need 10,785 page views per month to earn $1000 from that site.
Currently, that site makes an average of $556 per month for me, so again I am not hitting my traffic targets as yet.
Amazon’s commission reduction
Annoyingly, I was hitting my $1000 monthly target with the auto site, but Amazon’s recent reduction in commission has had a big impact. This is what I would have earned prior to the recent kick in the teeth from Amazon.
Niche: Auto
Average product price: $320
Amazon commission: 8%
CTR: 11.14%
Conversion Rate: 8.67%
This translates in to the below formula.
1,000 / (320 * 8% * 8.67% * 11.14%)
So how many page views do I need to make $1000?
Plug that in to Excel and I would have needed 4,044 page views per month to earn $1000 from that site.
Which means that prior to Amazon’s commission change, I was nicely hitting my $1000 per month target!
Profit & ROI
It is all well and good knowing how much traffic you require to make $1000, but the cost of acquiring that traffic is a huge factor in determining if:
a) you should target a niche in the first place
b) if the niche remains a viable target, or you should concentrate your efforts and money elsewhere.
Costs that you should include in your ROI calculation
This is not an exhaustive list, but it does include many of the most common costs you need to factor in to your ROI calculations.
- Domain
- Hosting
- Plugins
- Content
- Payment processing fees (bank/exchange/gateway)
- Traffic (CPC/SEO etc)
Non Amazon Affiliate Sites
Amazon is not the only affiliate programme on the internet, although it is the biggest, and given the recent reductions in commission %, many of us have been looking at alternatives to maximise our ROI.
There are a lot of affiliate programmes, but depending on your niche, you need to accept that some may not convert as well as Amazon, as they are not a household name, and you are likely to lose the ‘other’ sales you get with Amazon when a someone buys other items whilst shopping.
However, there are some serious benefits, like increased commission % (6, 8, 10 or even 20% commission vs 1, 2 or 3%) and cookie expiration (30 days instead of the 24hrs that Amazon give you).
Alternative affiliate programmes
Personally, I have been looking to work directly with manufacturers who sell direct from their own website. So I contacted a number of them, and I am sending my traffic direct to them. In one micro niche I target, this has meant I now get a 10% commission on products costing between $2500 – $6000, with a 30 day cookie.
You need to remember that Amazon take a % cut off each sale, so the manufacturer is saving money by taking your sales directly. This can actually help you drive up the commission %.
A new approach
You could also look at changing your approach and negotiate a pay per call rate or something else which maximises your traffic and increases your ROI.
CPA / CPI / CPL
It is not all about affiliate sites, there are many ways of earning from IM, and CPA, CPI and CPL are popular alternatives, especially given the current economic climate and affiliate commission cuts.
Obviously with CPA, CPI and CPL, you are looking to get someone to pay for something, install a programme, sign up to a website or programme, provide their personal information, basically take an action after viewing your page, or sending them to an advertisers website.
CPA / CPI /CPL Formula
Sticking with our ‘how much traffic do I need to make $1000 per month?’ question. The only real difference in working out how many page views you need to make $1000 from CPA, is to factor in the CPA Rate, CTR and CR.
The formula you need to use is below.
$1000 / (CPA rate * Affiliate link CTR * conversion rate)
Lets break that down to make it a little easier to understand.
- CPA rate: You can get this from your affiliate marketing programme dashboard, i.e. Maxbounty, Commission Junction etc.
- Affiliate link CTR: The click through rate is worked out with the below formula.
(Affiliate link clicks / total page views) * 100
- Conversion rate (CR): You can get this from your affiliate dashboard reports, or if you have not started with a new niche yet, you will have worked this out as part of your planning.
Real world example
Theres nothing like a real world example to take the dull out of formulas, so lets look at one of my sites which sends traffic to Maxbounty CPA offers.
Niche: Mobile Gaming
CPA rate: $6
Affiliate link CTR: 24.18%
Conversion Rate: 3.2%
This translates in to the below formula.
1,000 / (6 * 24.18% * 3.2%)
So how many page views do I need to make $1000?
Plug that in to Excel and I need 21,539 page views per month to earn $1000 from that site.
The advertised EPC for that particular offer is $0.28, I am currently getting around $0.08, I need to either address my on page message to increase conversions on the next hop, or the offer simply does not convert well.
Affiliate or CPA?
When you compare the CPA site to the Amazon home affiliate site, the CPA has a much better potential return, almost twice as good, but this is where the ROI calculations come in.
It costs me considerably more to target that offer/niche, either via CPC, Social or SEO, compared to the home niche. So my costs to generate the page views reduces the actual ROI received from this IM method.
In other words, you need to include these factors in to your planning phase, to ensure you pick the right offer or product to market. And your conversion rates and click through rates are hugely effected by the quality of your affiliate sites, landing pages and traffic.
Considerations & Personal Findings
- Quality of traffic is key to increasing your CTR & CR. Ranking buyer intent KW’s on Google means you need less monthly page views to hit your target.
- Non Amazon affiliate programmes potentially mean increased revenue, however, we know that Amazon converts extremely well, so you need to at least ask yourself the question “will my conversion rate be as high with another store/brand?”
- Amazon reduced the commission 6 weeks ago, but competitors in my niches are still pushing sales to them. No one has jumped ship! I am no expert in Amazon affiliate sites, and the people above me in the SERPs make a LOT more money and have a LOT more to lose, so it is interesting to see that none of them have made any moves elsewhere as yet.
- CPA is a great alternative right now. Although it can push you in to more competitive niches, which costs more to generate traffic, you can add complimentary offers in to your existing money pages and make a better return than using Adsense or relying on Amazon only.
