Clickbank Case Study: Product Analysis
So you’ve made it past the first day, got your short list of potential products you want to promote, and now you’re ready to get your hands dirty and pick out a (possible) winner.
Congratulations, here’s where the fun part starts.
Before I start hitting you with all the technicals of detailed product analysis I want to mention a couple of things.
First off, nothing can take the place of experience when it comes to doing this, so keep in mind that the more you work at it, the better you’ll get.
And second, DO NOT get caught up in all of these metrics. At the end of the day, you have to trust your gut instinct. The key thing to remember is that there’s a real person conducting the search, reading the sales letters, and making the decision to purchase something or not.
With that out of the way, here’s the 9 products I picked from my initial research yesterday. I like to put them in an Excel file so I can analyze them side-by-side to see which one will be worth my effort to pursue further. Here’s the columns explained:
Product. Self explanatory.
First Appeared. The date which the product appeared in the Clickbank Marketplace. This is important for a couple reasons. Number one, products tend to have a “lifespan” - they surface, sell for some time, and decline. Depending on the product, some will never sell at all and disappear, and some will rise to the top of their category and stay there for months, or even years. I tend to stay away from older products, but that’s me, you might have better luck. Second, if it’s a new product and gaining popularity fast (explained below) you’ll want to jump on the bandwagon and start promoting it as soon as possible.
Gravity. In the simplest of descriptions, this is the number (not absolute, it’s a weighted figure) of affiliates promoting the product in question. A high gravity means that the product is popular and making people good money. This is a great indicator. The higher the gravity the better, but this also means more competition for you. Although gravity is a very important metric, I don’t always rely on it 100%. I’ll still promote a new product with a gravity of 0 if it looks good to me.
Trend. This is a graphical representation of a product’s metrics such a gravity and popularity that can you can see at CBtrends which Andre also mentions in his blog and Chris in Adwords Miracle (this is where I learned it from as well). I just make a little note if the product is on the up or down here depending on the graph.
Ideally you want the Popularity curve to be declining and the Gravity to be increasing.
This product (Stop Being Tired) is gaining momentum fast and it’s also new (first appeared ~1.5 months ago) so this graph is a good indicator that this can make you some good money if you start promoting it before it gets too popular and competitive.
Price. In my experience, the higher the price, the harder it’s going to be to get the sale if you’re just sending people directly from Adwords. This is a different story if you have a squeeze page and warm up the potential buyer by sending him a few emails first, or you have a list of your own, but I’m assuming for the sake of this case study that no one is using an existing list. Don’t know if squeeze pages are “allowed” 
Besides the first product on my list, the prices range from $30-$67. Not an unreasonable amount to ask from someone on their first visit to your merchant’s site, in my opinion.
Commission. I jot this down just for the sake of calculating potential refunds (will explain this later).
Earned/Sale. My favorite number
Potential Refund Rate. I’ll stress the word “potential” here. Two affiliates can experience two very different results with this one depending on how they choose to promote the product. This figure is calculated by the product price, commission, and the earned/sale metrics and with a little tool I got as a bonus for purchasing Adwords Empire. Check out this cool screenshot.
I’ll usually shy away from a product if the potential refund rate exceeds 20%. There’s nothing worse than having something convert for you like crazy just to have those sales revoked in the next few days. The only exception I make to this rule is if the net profit is high enough to “overcome the pain of the dreaded refund”.
That wraps it up for metrics. In the next post I’ll pick one product based on all the metrics here, analyze the sales letter and then move on to KW research.
Now go analyze your own products and don’t come back ’till you finish all your homework