Amazon PPC 2020 - 3 Ways To A Successful Bidding

10/31/2019

No matter what niche you're selling on Amazon, dog-whistle or jeans, you need an advertisement. For the advertisement, you have to do bidding for sure.

Amazon bidding is all about the competition between you and your competitor. An ideal PPC strategy would obviously focus on maximizing the ROI (return on investment) with ideal ad placement.

Most Amazon PPC Experts know that bidding strategy is crucial for a higher Ad rank in Amazon search as well as for ideal ad placement. There is a different CPC for different ad placements; you can find this on placement settings.

The anxiety to maintain a lower CPC and a higher conversion rate is something that's very much constant.

I am going to share some top bidding strategies that will help you run a successful PPC campaign. 

Use Bid History for making decisions

Amazon PPC is less about the strategy and more about analyzing the data. Sellers who follow the data succeed while the rest die.

Amazon PPC Strategy 2020 highly values bid-history because it helps in calculating the perfect bid. Follow these 2 steps to make a perfect bid!

  1. You need to calculate the revenue per click (RPC) by dividing the total sales with total clicks. This will tell you the exact revenue on each click. I recommend sellers to calculate RPC for at least 30 days because that shows you the changes in data.
  2. Now, to calculate the perfect bid; multiply your RPC by the targeted ACoS.

Appropriate Expert Value

In Amazon PPC, You can't anticipate the value of a click without sufficient data. I am sharing you an easy way to anticipate the value of a click which is in line with the Amazon PPC Strategy 2020.

We'll take the 3 important components into consideration for anticipating the starting bid.

  • Expected Conversion Rate
  • Sales Price
  • Target ACoS

From the definition of conversion rate (CR), we know that it is the result of purchases against the total clicks.

Here, we need to estimate the expected clicks it would take to make a purchase. This is called the Expected Conversion rate.

So how do we estimate the expected conversion rate? Probably, by the fact that Amazon has an average conversion rate of 10%. With an average account, you can take this figure for your expected conversion rate.

The sales price is the cost of your product.

ACoS is your target advertising cost over sales. In easy words, it is your profit margin in the form of a percentage.

The general formula of ACoS is described as the ad spend minus sales. (Ad Spend - Sales)

To calculate the ideal bid of the campaign, we would take a supposition according to the historical performance of your account:

Let's say:

Expected Conversion rate (CR) is 8%

The selling price is $30

Advertising cost over sales is 30%.

In this supposition, the perfect CPC would be $0.72. 

Consideration

Regarding the anticipating part, successful sellers are the ones who make changes according to the real-time data. If during the initial part of the campaign, the conversion rate comes out to be less than 1%, the seller should increase the bid accordingly.

So, you should always be thinking about making changes. If the set bid isn't driving great results, you should definitely consider making some changes. People who think that we should stick to the same values always fails in Amazon PPC.

It should be noted that all of the above calculation is based on the estimation from the past performances. The ideal Amazon biding for you depends upon your account and the similar ad sets.

If you're a beginner, consider going ahead with easy steps. 

Over to you

Having guts is important in business. Playing with the data is even more important especially when you're running an advertising campaign.

Increase in a bid may certainly increase the conversion rate (CR) along with the Ad spend which may lower your profit margin. A little decrease in the profit margin should not worry you as long as you're getting conversions.

Amazon PPC can take your business to the next level if you do it the right way. It's all about playing your cards in the right manner.

Mark my words; these 3 tricks to Amazon PPC Strategy 2020 will make a huge difference in your profit margin. 

About the Author

Daniyal Shahid

Daniyal shares an in-depth knowledge of Amazon Marketing with a comprehensive experience in PPC and listing optimization. He is a highly successful Amazon Seller and has been in the industry for over 10 years. Daniyal aims to help Amazon sellers with useful insights to Amazon Marketing.