Everybody wants to know which Clickbank products to promote! Ain’t this the $64,000 question? To begin to understand the most profitable Clickbank products to promote, you first need to understand a little about how Clickbank groups their products and how they are ranked. Clickbank basically has four factors by which they organize the products in their database.
% Earned Per Sale. This is the average commission earned per affiliate per referred sale.
$ Earned Per Sale. This is the average net amount earned per affiliate per referred sale. This figure is affected by refunds, chargebacks etc. Hence, it is Net.
% Referred. This is simply the percentage of the Publisher’s sales that are referred by affiliates.
Gravity. This is the number of unique affiliates that made a commission by referring a customer to a publisher’s product and the customer purchasing the product. Clickbank lists it not as an actual number but as a weighted sum. Gravity is basically a measure of the popularity of a product and how well the product is selling. A higher number would indicate that a product is selling well. Of course, this means that there are others selling the product, which means that there is competition. What is a high number? 40 or higher would be what I would call high.
So, How Do We Use These Numbers? I think the best way to use the information Clickbank provides to us regarding the digital products in its database is to first aim for products with a fairly high gravity number but that also have a low refund rate percentage, which equates to promoting a product that is selling well but also is being refunded at a low rate. This would indicate a quality product. (Remember that just because a product sells well does not mean it is a quality product, it may just have a fantastic, high converting sales page and the actual product may be a dud, thus prompting many refunds. So, we need a way to calculate Refund Percentage Rates.
How To Calculate Refund Percentage Rates Here is a formula to use in order to calculate the Refund Rate of Clickbank products:
(Product Price – 7.5 percent) – $1 = Clickbank’s commission on each product sold Product Price After CB Commission x Payout percentage = Your Affiliate Commission - $Earned Per Sale = The Refund Difference ($Refund Difference / Affiliate Commission) x 100 = Refund percentage Let’s Try An Example With A Current Clickbank Product We’ll use The Forex Trading Machine as our example.
Data:
Product Price = $97.00
$ Earned/Sale = $40.15
Payout % = 50%
So,
Clickbank Commission = ($97 X 7.5%) + 1 = $8.28
Post Clickbank Commission Price = $97 – $8.28 = $88.72
Affiliate Commission = $88.72 X 50% = $44.36
Refund Difference = $44.36 – $40.15 = $4.21
Refund Percentage = ($4.21/$44.36) X 100 = 9.49%
What does this mean to us? Well, first off, I think that any product with a Refund Percentage of less that 10% is a quality Clickbank Product. Clickbank will tell you that every product can be assumed to have an inherent 5% Refund Percentage Rate due to consumer fraud. So, less than 10% is pretty good.
Why do we care? Because you don’t want to spend your time and money promoting a product that is going to end up generating a lot of refunds. You would, in essence, be wasting your money, as a high Refund Percentage will certainly lower your Return On Investment. Remember, Return On Investment is simply measured as the amount it costs you to generate a certain amount in sales. If you spent $5 in Google Adwords® promoting a product and you made $10 from this advertising, your ROI would be 100%, which is excellent.
Generally speaking, products with High Refund Percentages yield a lower ROI. Not good. So, I would stick with promoting products with a low Refund Percentage in order to prevent a low ROI and also promoting high quality products with high customer satisfaction just makes sense.