Formula 1 Is Equivalent To Formula 4 Both Calculate Cost. How to Calculate ClickBank Refund Rate In 4 Easy Steps

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How to Calculate ClickBank Refund Rate In 4 Easy Steps

For those promoting products from ClickBank, you can take note of the return rates of these products. It would not be very wise to promote a product with a high paying commission but a high return rate. There are four easy steps to calculating the return rate for ClickBank products.

The formula is simply like this:

Step 1: (Product Value – 7.5%) – $1 = Net Commission

We begin to calculate the net commission where the formula (product value – 7.5%) – $1. The percentage of 7.5% and $1 is actually ClickBank’s commission fees as an affiliate network to handle all the processing and administration. So by subtracting ClickBank’s commission from the product price, this equals your ‘net commission’.

Step 2: Net Commission x Payout Percentage = Affiliate Commission

This is where you multiply your net commission by the payout percentage, which equals your affiliate commission.

Step 3: Affiliate Commission – $Earned/Sale = Return Difference

Get the return difference, you earn/sell price minus your affiliate commission.

Step 4: ($ return difference / affiliate commission) x 100 = return percentage

This equals your return percentage after multiplying the return difference by 100, divided by the affiliate commission.

Now show this more clearly with an example. I will use “Stream Online Movies” as our example product. There are 3 variables we need to consider.

Product price = $45.95

$Earnings/Sales = $25.21

Payout Percentage = 75%

The product price is actually $45.95. Product pricing can be found by clicking on ‘view pitch page’ which will direct you to the sales page offering and you need to search for product pricing. To stream online movies, you need to click on “Get Access”, register your email address and you will be taken to the sales offer page where you can see the product price. In other cases, the product price can usually be found by scrolling to the bottom of the sales offer page.

The amount earned per sale is obtained from the first column of ClickBank’s Marketplace search results. The cost per sale for streamed online movies is $25.21. For this product, the payout percentage is 75%.

So now let’s work on the calculation.

Step 1: ($45.95 – 7.5%) = $41.50 (net commission)

You need to start with the product price, minus 7.5% of ClickBank’s commission, minus one dollar and that equals your net commission.

Step 2: ($41.50 x 75%) = $31.13 (Affiliate Commission)

Then using your net commission, multiply that payout by 75% to equal your affiliate commission; In this case, it would be $31.13.

Step 3: ($31.13 – $25.21) = $5.92 (refund difference)

Then subtract the affiliate commission with the earned/selling price and you will get a return difference of only $5.92.

Step 4: ($5.92 / $31.13) = 19.01% (return percentage)

The return percentage is calculated by dividing $5.92 by the affiliate commission multiplied by 100. This equates to a relatively high return percentage of 19.01%.

This shows that this product is moderately successful as 19.01% of their customers have requested a refund. There are many products with different return percentages. Returns are common in sales and marketing. Typically the rate of return you want to see on a product is anything between 0 – 10%. Of course, the lower the return rate, the better.

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