Pay per click(PPC) best practicies

What is PPC?

PPC is Pay Per Click Amazon ads system integrated into Amazon marketplace. It works as many others ad systems: you specify keywords, set click price you are willing to pay and Amazon shows your product in search results related to specific keyword. This way you are able to attract more customers to your details page.

Do I need to use PPC?

If your product is not on the top of the search result list you probably need to consider to start PPC to generate some initial sales and probably get organics ranking and reviews. Moreover many top ranked products still use PPC to increase sales level, because “sponsored” products are shown also on secondary pages where customer often go.

The second reason to use PPC is sales keyword discovery. In order to learn what keywords generate sales start Automatic compaign and give about two weeks to generate sales.

When to launch the PPC campaign

To achieve more effective sales ensure your product has:

  • At least 3-4 reviews
  • Properly composed bullets & description
  • Attractive images

before starting paid campaign

How much should I pay?

Click cost

Click cost depends on your competitors amount. If you’re on high competitive area click can be 2$ and more. If you set too low cost then Amazon will avoid showing your ads. You need to find optimal price for each keyword. With automatic targeting you don’t select keywords and set only your budget. Everything else is done by Amazon: it crawls your detail page, extracts keywords and decides what keywords and match types are bid on and at what bid, based on the information it has about your listing.

Total ads budget

It depends on you, but we suggest to start with $100-$200 per month.

Patience is good Amazon habbit

When it comes to Amazon business your patience is tested many times. You should wait from 1 day to several after you made change to PPC campaign to see if it has desirable effect. Don’t hurry! If you make changes too frequently you will never know if they works or not. Amazon is very slow at applying changes.

Campaign optimization

After a week or two you will be able to detect sales keywords and their efficiency. The efficiency at PPC is also known as ACoS that is Advertising Cost of Sale.

Let’s calculate your upper ACoS level below that your product ads remain profitable.

Imagine your product price consist of:

  • Selling price: $30
  • Manufacturing price: $5
  • All FBA Fees: $12
  • Shipping cost from China: $3

Now subtract all expenses from selling price: 30 - 5 - 12 - 3 = $10. So we can spend up to $10 to get a sale and still be profitable. The upper ACoS level is: 1030 = 0.3 = 30% Your ACoS threshold is 30%, meaning that you would be making money on any keyword that has a Cost of Sale at 30% or less.

Inspect your keywords stats and pause keywords with ACoS factor higher than 30%.