adwords PPC profits possible?

I cant see how an adwords PPC campaign can be profitable. (Eventhough I know it is)

The best conversion rate I have ever seen on any online product via any methods (other than ppc) is 3-5%

So for every 100 visitors I expect to get 3-5 sales. Considering the average order is $50 and my profit margin is 25% how the heck can I ever expect to be profitable with adwords?

All keywords for my niche are $1.00 min to hit the front page. However I am down to averaging .80 per click.

So 100 clicks cost me $80 and I make $62.50 in profits. WTF??

I would need to get under .625 per click to have any profit at all.

Thats impossible using Search networks with the niche I am in.



---- What am I missing?

use long tails and take angles. dont' be so direct with your keywords if you don't wnat ot pay $1 per click

Bid way down. Just because adwords says you have to bit $1, doesn't mean you actually have to bid or pay that much.

Target long tail like dishnetboi said.

Anyway you can collect information from the 97 people that don't buy. Start collecting email addresses