Work From Home Tips: The EPC Formula

If your work from home involves a lot of PPC advertising and Google AdSense ads or things like that, you may have encountered the term EPC one way or the other. EPC or earnings per click is known to be the total commissions generated divided by the total number of clicks over a certain period of time. Other than EPC, some terms that may have made it to your “work from home” vocabulary are CPC or cost-per-click, PPC or pay-per-click, CTR or click-through-rate, etc.

Knowing the EPC of, say, a particular affiliate program, an Internet marketer will be able to learn how efficient that program is and roughly estimate the income that will be generated. This is important so that you will have the idea which advertiser’s program you should choose and which one will give you fair earnings. Although several sites, groups and web personalities may draw different formulas for getting EPC or earnings per click. Most would go by this formula: (number of sales X price of product)/number of clicks.

So basing on that formula, let’s see how we can tweak and boost our earnings per click a bit for our work from home. Say, you have signed up for a program that pays you $30 for each product you sell and you sent it to 100 people. Out of those hundred bunch, only 5 bought. So that means your total number of sales is 5. That leaves us now with (5 X $30)/100 which is equal to 1.5, this is now your EPC. And that’s not pretty bad.

That is if you are lucky enough to sell five products. But because computing EPC is done before you sign up for an affiliate program, most marketers just assume one product sold. That will give you an EPC of 0.3. You can really see how the three factors involved in the formula can greatly affect the outcome of your earnings per click.

Price of the Product
Some folks who work from home would tell you to go find an affiliate program with products of higher value. Is a program with a $25 commission better than another program paying only $10 commission? Not necessarily. With the first program, you can estimate your EPC to be 25 cents per click if you had 100 clicks and one sale. For the second one, you will only be earning 10 cents per click. The only way that the $10 commission program will be better than the $25 one is if you got more sales out of those 100 clicks.

For example, you will be having a higher EPC with the ten-dollar program if your total number of sales is 30 which gives you $3 per click compared to the twenty-five-dollar program with only, say, 10 products sold. That will only give you $2.5 per click. So you really can’t say that you can boost your earnings per click just by choosing commissions, products or ads with higher value.

Number of Sales And Clicks
Maybe a product with a higher value can help increase your EPC but what’s more important is traffic and not just any traffic, but quality, targeted traffic. It doesn’t matter how many clicks you are getting if only a few of them converts. It doesn’t matter how many people you send the product to if only a few of them actually buys it.