When you start PPC you can probably get a "free" trial that let's you spend $100 of the company's money. In other words, Google, Yahoo or MSN pays for you to learn. Let's say that the vendor pays you $25 per sale. So if you sell 4 items, you will have that $100 right off and it is all profit because you paid nothing. But if you paid that $100 then your profit would be ZERO. However any other sells would bring in a profit.

CASE 1: You set up a PPC campaign to sell a Canon HSTU Camera (which does not exist) for which you will get $25 for each one sold. You set up a campaign with a spending limit of $100 because that is all you are willing to lose. You "buy" the keyword "buy Canon HSTU" which cost $0.25 per click. So you can buy 400 clicks. Of the 400 clickers on your keyword ad, 100 leave their email address and go to the vendor's site. Ten (10) buy the camera of which eight (8) also buy other things from the vendor's site (such as Amazon.com). The return is $250 plus an extra $12 for extra purchases. Your profit is $162. You also have 100 email addresses to which you can promote similar products. You step up the campaign for that keyword. As the campaign goes on you watch to see if the cost of that keyword is going down because Google or Yahoo or MSN decides they love you. You test other keywords in separate campaigns. You watch daily spending limits.

CASE II: All the above but the keyword gets clicks but nobody buys at least not enough to generate a profit. Now you have to find out why folks are not buying. If you think your landing page is OK, then you change the ad, test several different ads. You try different keywords. Maybe you are just getting tire kickers rather than buyers. You change your demographics cutting out people under 30 and over 50. You carefully test until you return a profit. Now did you really select a product that is hot in the marketplace or did you pick a dud?

You always want to check your vendor for the popularity of the product. If the vendor has an affiliate manager, contact him in the beginning so that you get the right start. Next the value of the list.