If you sell any private label product through Amazon FBA, then Amazon PPC is the number 1 thing you need to master. If you want to sell more product through Amazon and want to rank you product fast on the first page of Amazon then learning and understanding Amazon PPC is no brainier. The problem is no one teaches the Amazon PPC the right way so in this article I will discuss in details how I profitably advertise my product through Amazon PPC so you can follow the same guideline to promote your private label product.
What is Amazon PPC?
Amazon PPC or Pay Per Click, is an advertising platform that is build for the Amazon FBA sellers. You can pay to show your product on the first page of amazon for specific search terms. Your product will be shown on the top of the page before the organic searched product shows up –
Even though it sounds easy, the amazon is PPC is much complicated than most newbie think it is. Most new and veteran sellers gets it wrong. A lot of people loses money too. But there is a guideline that you need to follow in order to make the advertisement effective. You need to understand the Amazon Search Engine, keep testing and tweaking your ads, run them consistently, optimize and stay patient. Patient is the key while advertising in Amazon.
How Does the Paid Search Works in Amazon:
Amazon has over 170 Millions active users who shops every month on Amazon. That means amazon has a lot of data to go off of when amazon shows a product that the customers will be interested in.
People usually goes to Amazon and type in the desired product they want to buy. You can search anything on Amazon and you will see the first few product products has “Sponsored” in it. Those are promoted products for that search terms (See he Image above). After the sponsored product you will see the product that rank organically in Amazon for thesearch term.
Just think about that? How powerful it is to be able to show your product above the sellerwho worked years to rank their products in the first page of Amazon. So that’s why you need to master Amazon PPC, because that gives you a chance to outrank your competition.
Strategies Behind Amazon Pay Per Click Campaign:
Alright now running PPC campaign is easy and straight forward but understanding the fundamentals is more important cause that makes your advertisement profitable in long run. Here are the few fundamentals for you need to follow while running ads for your private label products.
Here are the fundamentals for running PPC:
- Run Ads for LONG enough time to find the profitable keywords that works.
- Pause keywords that does not convert
- Scale on keywords that converts into sale.
That’s the basics you need to keep mind. Now before jumping into the details of lets study few important Amazon that you need to know and understand:
ACOS (Advertising Cost of Sales):
It’s the cost that was attributed to sale a product on Amazon. Its simple equation. If you sale a product for $20 and you spent $8 to sale a product the ACOS is 40%. Simple math – ($8/$20)*100 or (Selling cost of Unit/the actual product cost)*100. And you will find out what percent of the money you are spending to make a sale.
Number of time your promoted product was shown to the customer while you were running ads for that products. Simple and straight forward. Sometimes you have to wait upto 3 days to see impressions for the product. So don’t get impatient, when you are not seeing any result right away.
Clicks are simple to understand. How many times the customers clicked on your ads from the impression. Clicks determines how engaged the customers are for that particular product. Clicks are not main metrics but it gives you a sense of whether customers are engaging with the product or not. It also takes amazon up to 3 days to show the clicks in Amazon Seller Central.
It sounds exactly what it is. How many order you get from that particular campaign. The orders are most important cause that makes you money and also validate how well your product is performing. If you have no order for a product that means your ads are not converting. Which means you have to pivot and make tweaks for your ads.
Requirements Before Starting Your Campaign:
Before you start running ads and spend money on ads, consider doing the following –
- Create Optimize Listing for the Product
- Have high quality and authentic Images
- If possible have few reviews through giveaway or use platform like Jumsend.
These are few things you need to get straight before running ads effectively for your product. Will your ads work without them. The answer is “YES”. But its always better to do your homework before putting out your products in front of your potential customers.
Steps for Running Effective Pay Per Click Campaign:
Alright before we start our journey let me tell you the steps you need to take in order to become successful with Amazon FBA. You will be repeating these same steps over and over as long as you run ads for your private label products in Amazon. Here are steps
- Generate product related keywords
- Understand keywords match type
- Settings bids and budgets for the campaign
- Pause keywords that does not convert
- Optimize and Scale.
How Much Do I Spend In a Day:
It literally depends on you. I like to start small and scale up from there. Also, I like to various sets of Ads for the same product but on a smaller level. I start with $7 to $10 per campaign and then give it a week. Then I see the result and based on that I scale and optimize.
But if you want to get fast result you can start with $20 to $50 per ads campaign and get some result on your hand faster. If you have an amount in mind that you want to achieve and want to go out there and try to prove your market faster, you can always start with a higher budget.
Calculate Your Ideal ACOS?
What is ACOS and why does it even matter? ACOS is the most important matrices, while running Amazon PPC.
ACOS stands for the Advertising Cost of Sales. This number reresents how much you spend to sale one unit. You need to determine the amount that you can go out and spend to get a sale to break even first. Once you can determine that number than you can mesure the ads statistics correctly.
“But how do you determine that? Before you can determine that number you need to have few numbers in hand –
- COGS (Cost of Goods) – How much did you spend to make the product and get it shipped to your home.
- Amazon FBA Fee
- Miscellaneous Cost for Shipping Inventory to Amazon.
- Selling Cost for Your
Now let me give you an example. Let say you are selling Plastic hand gloves. You are selling the product for $20.00. Cost of goods is $2.00 from china to your home, Amazon FBA Fee $6.18 with shipping cost and Miscellaneous cost $1.00 per unit. So $2.00+$6.18+$1.00 = $9.18 which is how much you spending upto sending the products to Amazon Warehouse. Now you selling the product for $20.00, which means you can make upto $10.82 per sale.
That also, indicates that when you are running ads for your product you can spend upto $10.82 to make a sale and still break even. In that case your ACOS is 54.01%.
The formula for ACOS is simple (Profit Margin/Selling Cost of the Product)*100.
Always keep that number in mind, cause your target will make a sale below the ACOS number in order to be profitable with Amazon PPC.
Now there is two ads objectives that you can select from. One is Sponsored Products and another is Headlines search. With sponsored product you can promote one product at a time and the product will be visible above the organic search. Headline Search Ads is where you can promote product catalog as a brand. You will be able to promote more than one product from the catalog. You will be able to promote more than one product at one time when you place ads using the headlines search.
Now there are two types of ads you can run while promoting your products in Amazon. You can use run Auto Targeting Ads AKA auto Bids an Also you can do Manual Targeting using Manual Bids. They are both effective and works pretty well for promoting your products. I personally like to run them both simultaneously to compare which ads is performing well and have a lower ACOS.
I will explain how you can each type of ads for your private label product for your Amazon FBA business.
Running Auto Bids Ads:
First of step of running PPC ads is selecting the Ads objective. Since all my ads runs on Sponsored Product objective, I will show you can do place the Sponsored Products ads first. You can implement the same for the Headlines Search Ads if you would like.
After selecting the ads objective fill out the campaign name, daily budget, and ads group name. Once those filled out, search and select the product you want to promote and select a recommended budget for the product that you want to promote.
Just make sure that the Auto Targeting is selected from the targeting section, which will help you to run the ads on auto bid. What that mean is amazon will go out there and will crawl your product listing, and it will find the keywords which the amazon going to show your product for.
Amazon A9 will figure out when you recommend your product to the customers when they come to Amazon and searches for any product.
Running Manual Ads Keywords:
For manual bids ads you can select a list of keywords to run ads. Manual bids keywords gives you access to tell amazon when it can show your products to the customers. The only time Amazon will show product to your customers when a customer search for a product that is related to the keyword that you selected. Also, you will have to find keywords that you can use to target to run your ads for.
I use a software call MerchantWords to find the keywords for my manual bidding ads. Its cheap and affordable and I am using this tool from the beginning of my business.
Once you have the keywords in place for the manual bids ads, it time to select the bids type. Bids type will determine how and when amazon will show your product to your potential customers. I have shot a full video describing my Amazon PPC strategies on the video above. You will learn my strategies in details once you see that video.
Let the Ads Run – Don’t Touch ‘Em:
Alright, the problem with most FBA seller is they Lack Patient. If you place an ads
let it run for 7 days to acquie data. Don’t just cut the ads, because your ads did not make money within 24 hours. Be Patient and give it time to spit out some some data.
Some times it takes up to 3 days to show any result from the ads. Let the ads run for a week or two, becaue you will be able to find the keywords that’s working for your ads. Also you can fine tune the ads by adding negative keywords which costing you money but does not convert into sale.
It’s crucial that you find the keywords that makes sales for your products, because you can later use those keywords to scale your ads. Let the ads run and optimize the ads after atleast 2 weeks of time.
Optimizing Your Amazon Ads:
Now there are few ways you can optimize your Amazon Ads campaign. Here are few of them
Filter the Keywords by the ACOS:
Remember we discussed about the ACOS. Now after running the ads for a week or two, you can satrt seing the keywords that is becoming profitable. Who keywords are golden. You can bid higher for those keyword and pause those keywords which are not converting at all. That you can can keep your keyword list fine tune.
Also, if there is keywords that is converting but costing you a lot more than what your ACOS is, you can pause those keywords as well. Those keywords will save you from bleeding money.
Filter By Orders:
You can filter the keywords that is converting to sale. Those keywords are golden and could be seperated and used for newer ad sets/campaigns. If you can pile up order keywords over certain perieod of time that will help you to easily cut out the loser overtime.
Those keywords will help you to scale your product faster cause you will be able place ads with the keywords that you know your customer searched and bought from. What could be more profitable than that?
For manual bids ads, you can always go back and adjust bids for your keywords. If you see that your ads is performing well for some keywords you can surely go back and place the highest bids for those keywords. Once you have the data’s in hand you can surely scale your ads for those sets of keywords.
For example, if you know for a particular keywords, you want to rank for you can always bid higher than your competition.
Add Negative Keywords:
Add the negative keywords in your negative keywords list as you find those keywords that eats up your ads budgets, but never made any money. It’s easy and fast. You can do it for each ads campaign, so don’t be lazy about adding those keywords.
Alright that’s all I had for today! If you want to learn more about Amazon FBA and PPC you can get my course in UDEMY. It’s very cheap. Don’t forget to leave a comment about how you felt and what you learned or if you have any question about anything.