10 Useful Strategies To Lower Your Amazon Advertising Cost Of Sale (ACoS)
5/53 ratings

This post is the recent addition in our Amazon Pay Per Click (PPC) series. In the earlier post, we have deliberated upon the fundamentals of Amazon PPC. We believe you understand that what Amazon PPC is, why it is crucial for a seller, its essential components, and how Amazon A9 ranks your products. If you are not yet clear about the basic concepts of Amazon PPC, go through our post Fundamentals of Amazon Pay Per Click (PPC).

Amazon Pay Per Click (PPC) is a conventional advertising campaign.PPC campaigns are an integral part of a seller’s advertisement strategies. It is easy, as well as tricky. Careless handling of the PPC can make you lose your bunch of bucks. We spend enough energy on PPC for designing Amazon Advertisement campaigns.

Sailing through the journey of Amazon PPC, the PPC series goes along with each topic to help you get maximum out of it. Today’s topic of discussion is Amazon ACOS (Advertising Cost of Sale). ACOS is the ratio of ad spends in comparison with target sales. ACOS is the decisive component in the success of your PPC campaigns.

Good ACoS vs. Bad ACoS

Most of the sellers still confuse what good ACoS and bad ACoS are. It depends on multiple factors. What is vital for you, as a campaign manager, is to devise your strategy and understand the product categories you are working. There are many misconceptions about higher ACoS as a negative connotation. Do you know? Higher ACoS can even mean profits at times. Mean thereby; you cannot point out single formula works for everyone. It is more likely trial and error exercise.

We are enlightening you with my strategies to lower your ACoS. Mind it: it works for many clients.

Effective Ad Campaign Management

While the product is in the nascent stage of its launching, we believe taking a start with Automatic Campaigns as well as Manual Campaigns alongside. You need to monitor your keywords constantly, adjust them and shift the profitable keywords to the manual campaigns.

Remember: it is time-consuming working strategy. Sellers get frustrated with the tedious process of observing things meticulously. You should take it like a puzzle or a rubric and find out the right combination for your product. Striking the right formula for success burns your energies, time, and test your patience. And, most of the sellers end up with hopelessness.

Right Keyword Bidding 

Admitting that Individual keywords have paramount importance, but the right combination of keywords work wonder. Your goal should be to find the correct set of keywords that resonates your product and make big ripples in the tank to maximize profits.

Ramify the keywords into lucrative keywords and futile keywords. Keyword bidding works in a range. You need to adjust bidding price under your budget as well as competition.

Use of Negative Keywords

The basic principle is to take those keywords in the campaigns to generate sales and vice verse.

At first, while spending sufficient time to monitor keyword performance, you would identify the ones that have reduced your profitability. Then, choose the nonperforming keywords and note them separately. Often, sellers have taken out such keyword to dismantle their effect. Surprisingly, they can play a significant role to lower your ACoS and control the profit margins.

It can be executed through market intelligence tools. These tools help you see what keywords are relevant to your product. Most of the sellers drive such keywords from automatic campaigns.

Cost Per Click (CPC) Strategy 

Amazon allows bid range against each keyword. What you suppose to do is to decide the whole set of keywords you want to contest. And, choose bids you intend to target as per your budget.

 

Let’s say, Amazon allows certain bidding range for the specific keywords. You have to choose the upper and lower side of the bidding range. Alike, dynamic bidding is another feature that allows the seller to lower and upper bidding, depends on your preference to place your product.

Dynamic bidding is quite tricky. You have to be extra cautious. The reason is CPC consider your default bid as a reference point and increase the bid. You should tackle it carefully. Learn more about dynamic bidding.

Separating Search Terms

PPC campaign has an exclusive feature for setting up separate bids for broad, exact and phrase match keywords. The bidding range varies in each category. Generally, broad match keywords have remote chances of conversion. However, chances of conversions are higher than with specific/phrase match keywords because buyer came with the intent to buy the particular product. Learn about Fundamentals of Amazon Pay-per-Click (PPC)

Competitors’ Analysis 

Select and target leading brands or the ones which you feel have optimized listing. So, you have to do extensive competitor’s research. You have to check what they are bidding on. Beware: don’t use competitor’s brand name in the backend keywords as it violations Amazon Terms of Services (TOS). The number of keyword research tools is available to show exact bid for exact keywords for a specific ASIN. Keyword research will also help you analyze a competitor’s strategy and understand the product’s behaviour.

Calculate the Profit Margins

You must know your break-even point. If you see that your cost per unit and the sales price has not much difference, then you have slim profit margins. In earlier days of your PPC campaigns, you have to strictly check your budget flows, because unnecessary clicks burn your bucks. The initial phase requires your attention to budget consumption as you are unaware of the performance of the keywords. It will help you move around break-even instead of exceeding. Amazon fee calculator is the best tool for helping you calculate your profit margins, landing costs, and other cost indicators.

Budget Allocation 

Be prepared to spend money blindly to make your product reachable to the prospective customers. You need to have a big heart to get the maximum out of PPC campaign. The earlier days of PPC campaigns will burn your bucks, and when you get stable, all get back to you with profits.

Conversion Ratio

There is no need to spend on the keywords that fail to give conversions at the end of the day. Monitor the conversion ratio regularly and reshape your strategy accordingly. Let the keywords grow, and the conversion ratio will also come to normal. It will take weeks or months to let your product fly.

Optimize Page Content

The least optimized your product content is, the lower the chances of conversions. The key to optimize your product listing is putting you in buyer’s shoes.

Have you ever purchased something online that offered a detailed description but no featured images? Your answer will probably no because you just don’t have enough visual details that are an integral part of the buyer’s intent of buying. Spend time as well as money to optimize your product listing: add eye-catching title, benefits-driven bullet points, and optimized A+ content, if you have.

PPC campaign alone will not help you make sales unless your product listing fully optimized. Learn about Optimize Your Amazon Product Listing: A Practical Guide

Here are some common scenarios you might encounter when optimizing your bids:

ScenarioAdvised strategy
Lower ad sales and high ad spendDown your bid on the keyword.
High conversion rate and low impressionsIncrease the bid that help you get more traffic and sales.
High clicks, lower sales and conversion rateAnalyze your page content and price point
High impressions but low clicks Work on optimizing your product image, title to improve your click-through rate.

Bottom line:

We hope these strategies will help you lower the ACoS and save your money. Now, it’s up to you to do it by yourself or hire a professional expert or agency. If you want professional services, give us a chance to skyrocket your sales through Amazon PPC campaigns.

 

Leave a Reply

Your email address will not be published.