Amazon ACoS is a crucial measure that can help Amazon sellers to assess the value of advertising and the effectiveness of an advertising campaign. In a highly competitive online marketplace, one of the fastest ways to increase your sales is to advertise.
To make money out of an Amazon PPC campaign, you must know the costs of advertising. Also, you must determine the beginning of a campaign to determine if it is generating a profit or not. This is where knowing and tracking ACoS on Amazon comes into.
What is Amazon ACoS?
ACoS is an exclusive Amazon metric that determines the amount you pay for every dollar you generate. Amazon ACoS is expressed as an amount and is vital in helping you figure out whether your advertising campaigns are profitable or not.
What is the Importance of ACoS?
ACoS in Amazon is crucial in determining the success of your campaign or lack of. The data you collect by analyzing ACoS can be useful in re-evaluating your amazon advertising strategy to make sure you stay profitable.
Amazon ROAS Vs ACoS?
ROAS is also more prevalent in pay-per-click advertising (PPC).
ROAS indicates how much money you can earn for every dollar you invest in advertising. In contrast, ACoS on Amazon shows the amount you pay for every cent you earn.
Both of these metrics are vital to determining the Amazon PPC campaign. ROAS is more concerned with the efficacy of your ads and ACoS is more concerned with the effectiveness of your ad spend, whereas ACoS is focused on measuring the profitability of your campaign.
To get the full view of your Amazon advertising strategy keeps track of both of these metrics.
What is a Good ACoS?
There isn’t a universal standard that can indicate an excellent or poor ACoS. A great Amazon ACoS will vary by product or industry, type of ad, and campaign.
So, an ACoS that is suitable for one company may not be the best for one. To see the complete view of Amazon ACoS, you’ll need to evaluate it in the right context.
For instance, you can examine your ACoS against other sellers within the same industry, country, or sub-category. They should also be running ads with the same design and format as yours.
Furthermore, a great Amazon ACoS will largely depend on the Amazon PPC campaign goals.
In order not to make your cost of living for Amazon low, it is possible that you could often aim to get a higher ACoS. This is a good strategy for situations like:
- We are introducing a brand new product to the market
- Eliminating a less-popular product
- If the objective is brand recognition and visibility
- Do you want to dominate a particular niche?
- Selling in a highly competitive market
If you want to make a profit, however, keep your ACoS as low as possible. In this case, the target ACoS should be lower than the profit margin so that you can still make a profit after spending on ads.
When your goal is to make as much money as possible, you should use this strategy. This strategy is also effective if a product does not require a lot of visibility to sell.
Having said that, most Amazon sellers have a target advertising cost of 30 to 35 percent.
In most industries, an ACOS of 10-20% is considered low, while anything above 35 percent is considered high.
How Do You Locate Your Target ACoS?
Finding the target ACoS is the first step in making the most of an Amazon ad campaign. This goal will be determined by how much you can afford and how much you are willing to invest in advertising.
Here are three critical steps to determining your Amazon ACoS target.
- Understand your profit margin.
- Determine your ACoS’s break-even point.
- Locate your desired ACoS.
How Can ACoS Be Reduced?
Keep this in mind if you have a high ACoS – lowering ACoS on Amazon is a matter of balancing your profit margin, ad spend, and bidding strategy.
If you want to lower your ACoS, you must target the right keywords. When harvesting keywords, the most important thing to remember is to use the most recent data.
You must also make regular changes to your campaigns to detect an inflated ACoS early on and make the necessary changes.
Furthermore, focus on fewer campaigns to avoid spreading yourself too thin. If you have more campaigns running than you can handle at once, it will be more difficult to monitor and optimize your Amazon ACoS.
You don’t have to figure it all out on your own; instead, use SellerApp’s Amazon PPC agency services to create an advertising strategy that will bring the right buyers to your product pages. Amazon advertising agency provides you with the expertise, support, and transparency that you require.
Recommended guide: Online business growth strategies.