He says he gets 5000 visits a day and the 25% / 0.5% stats are related to the 5000, not the 1800 from AdWords.

The AdWords visitors likely look different and sometimes it takes experimenting time and money to find an effective way to make a profit on AdWords traffic, so taking a small loss or breaking even in the short term isn't so bad. Acquiring customers has some value besides what they purchase that day as well -- word of mouth, repeat orders, etc.

I'm more worried about him thinking he can 2-4x conversion rate "within the next month"!