Determine The Formula Used To Calculate The Selling Price 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 may want to note the return rate for these products. It would not be very wise to promote a product that has a high commission but also a high return rate. There are four simple steps to calculating the rate of return for ClickBank products.

The formula is as simple as this:

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

We start by calculating the Net Commission where the formula (Product value – 7.5%) – $ 1. The percentage of 7.5% and $ 1 is actually the commission payments of ClickBank as a network that hosts all the process and management. So by subtracting ClickBank’s commission from the product price, this equals your ‘Net Commission’.

Step 2: Marketing Commission x Payout Percentage = Affiliate Commission

This is where you multiply your Net Commission by the Payout Percentage, which then equals your Affiliate Commission.

Step 3: Affiliate Commission – $ Earned / Sales = Different Returns

Earn the Return Difference, simply removing your Affiliate Commission above the earned/sale value.

Step 4: ($Difference of Return / Affiliate Commission) x 100 = Percentage of Return

The difference in Return is divided by the Affiliate Commission, multiplied by 100 and this equals your Return Percentage.

Now let’s show it more clearly with an example. I will use “Online Movies” as our example product. There are 3 variables to consider.

Product Value = $45.95

$Earned/Advertisement = $25.21

Payout percentage = 75%

The price of the product is actually $45.95. The price of the product can be found by clicking on ‘View Pitch Page’ which will lead you to the sales page and all you have to do is check the price of the product. To stream online movies, you will need to click on “Get Access”, register your email address and you will be taken to the sales page where you can see the price of the product. In some cases, the price of the products can be found by scrolling down the sales page.

Earnings per Sale are found in the first column of the ClickBank marketplace search results. Streaming movies online earned per ad $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 by taking the Product Price, subtract the 7.5% ClickBank Commission, subtract a dollar and equal your Net Commission.

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

Then using your Net Commission, multiply it by 75% Payout which is equal to 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 and the earned/sold price and you will get a separate Return of only $5.92.

Step4: ($5.92 / $31.13) = 19.01% (Refund Percentage)

The Cashback Percentage is then calculated by dividing $5.92 by the Affiliate Commission and multiplying by 100. This equates to a maximum return percentage of 19.01%.

This would show that this product is equally successful because 19.01% of their customers have asked for a refund. There are many products out there with different percentages of returns. Refunds are common in sales and marketing. Typically the type of return you would like to look for on a product is anything between 0 – 10%. Of course, the lower the rate of return, the better.

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