Traffic
Amazon cuts down the traffic that goes to the listing, mostly if we speak about new sellers.
Example. The bestseller with a bid of $1 may spend $2k; however, the newbie’s spend with the same bid can be $100. Amazon gives more traffic to the bestseller because of the simple reason - it’s much more profitable for Amazon.
Even if you set the bid of $100 and $20000 budget on a new listing, you’ll probably have 10-20 clicks/day.
Yes, Amazon also has other parameters for evaluating your profitability.
At Sponsoreds, we call it RPC (Revenue per Click) and RPP (Revenue per Product).
In time the situation will change. More conversion listing has, more traffic Amazon will give.
Note! Amazon has to be ensured in you and the profitability of your products for Amazon itself.
Bids
“Suggested Bid” is:
a bid that is not the same for every seller on the same market.
a bid that Amazon supposes to be the best for a particular seller to get a better position.
At Sponsoreds, we don’t recommend paying ample attention to the suggested bid. As a rule, Amazon will propose to you the position that is profitable to Amazon itself.
While starting new campaigns, there are two ways of identifying the default bid.
In case you’ve already run ads on the listing, and now you have some historical data download the Search Term Report and analyze CPC for the keywords/PATs in the exact match type and set the default bid correlates with the previous CPC.
If it's a new listing and you don’t have any historical data, start from the low default bid ($0.25, $0.50).
How to set up bids for different campaigns?
Zero to Hero structure is divided into three parts. Each part and each campaign has a particular bid and budget model.
For example, auto campaigns work with bids 3-4 times lower than manual campaigns because they draw low-frequency terms cheaper than high-frequency terms.
We created a percentage ratio for bid adjustment for different campaigns in the ZTH structure depending on the default bid.
Example.
IF Default bid = $1 THEN bid for Broad Negative = $0.55, TPK = $1.10, TPA = $1 etc.
Conclusion. Bids have priority. In case keywords draw relevant traffic, the bid should be higher; if there is a risk of getting irrelevant traffic, the bid should be lower.
More risk - lower bid; less risk - higher bid.
Budget
4 strategies budgets setup
“Simple” strategy - suitable for beginners who have a new product with some sales history and 20-100 reviews on the listing. The budget here is not too high. Bids are minimal.
“Revenue growth” strategy - requires a good quality listing; a number of reviews - 100 - 500. The budget is 50% higher than in the “Simple” strategy, still, bids are a bit higher. The goal here is to get a better position without risk.
“Max Traffic” strategy - the aim is to get maximum traffic. Amazon noted good RPP and doesn’t limit the traffic now. Work with placements. Use a high budget and high bids for placements (70% higher than in “Simple”).
“Profitable PPC” strategy - we use it in a case when:
there’s low inventory,
there’s a need to sell all stock forever,
we place top positions, and there’s no need to spend a lot on advertising.
Let's get deeper into the last point. In case our listing is on top of PPC and organic positions at once, we can confront a problem when the listing gets more paid traffic than organic. So, there’s no sense to spend on traffic that is already ours. Facing this situation, we recommend pull down the ads on the page. With the help of cheap CPC, we can drive traffic in the middle or bottom of the page.