Let's take, for example, handmade crafts. While crafting was a lucrative home-based business as little as two or three years ago, it's seen nothing but a decline in sales since then. Many crafters have gone completely out of business in past year alone.

Why? Because average American has less money to spend on luxuries and unnecessary items. The "down-sized" world we live in today has caused a snowball effect in many aspects of our lives.

Let's continue to use example of handmade crafts. Craft supplies are a necessary expense, of course. And for those who travel each weekend to sell their wares at out-of-town craft shows, there are other expenses to take into consideration. The average cost for one craft show can easily run $75-$100, not including cost of supplies.

And so crafter starts a vicious circle. S/he spends money trying to make money, but doesn't make enough to cover expenses, let alone turn a profit.

The term "conversion rate" is simply ratio of people that visit your site versus number of people that visit your site and buy something from your site. If you have 100 people visit your site daily and 4 people buy from you, essentially your daily conversion rate is 4%.

That's obviously an unqualified number because you don't have all information about those visitors for that day.

There is no real standard definition that everyone adheres to and agrees upon and there is no governing body that says online marketers must define "conversion rate" same way.

The "conversion rate" metric can take into consideration any of or more of following:

* A 1st time visitor to site versus 1st time visitor who buys your main product on 1st visit.

* A visitor who reviews your site but doesn't buy on first visit but does buy on a subsequent visit.

* A visitor who doesn't buy but joins your list and buys later.

* A visitor who doesn't buy your main product but joins your list and buys another product of yours.

* A visitor who buys a product from you not associated with main site which is where they were originally referred.

* A visitor who buys your main product in a bundle that includes other products visitor is interested in.

*And so on...

Take above scenarios and add in fact that most of time source of traffic isn't given, and you can easily get an 'ambiguous at best' definition of what "conversion rate" means.