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Amazon advertising cost-to-sales ratio, Amazon advertising cost settlement

2021-04-03 38
Amazon advertising cost-to-sales ratio

Many Amazon sellers have encountered problems such as poor advertising effects and high advertising sales costs. Similar to these problems, in fact, both novice and veteran Amazon may encounter. Because PPC advertising does not achieve perfect work all at once, it needs constant adjustments just like other traditional PPC advertising (such as Google AdWords).

There is no secret to success on Amazon PPC. Before starting to discuss specific issues, there are a few basic terms that must be understood:

ROI = return on investment

ACoS = advertising cost of sales

PPC = pay per click

The key to Amazon PPC advertising is to find the right search terms. Next, you have to compete with other sellers.

Because of bidding with opponents, your ROI and ACOS will fluctuate. Over time, these changes are normal, and different campaigns will perform differently.

But in the face of low ROI, sellers should carefully check the profit margin to see if the cost is too high. Sellers sometimes focus on sales without realizing that they are not making money at all! A transaction with a 45% profit margin is more valuable than 10 transactions with a 3% profit margin. Before deciding on the highest bid, you'd better consider all factors such as profit margins.

In addition, high ACOS or low conversion rate may also be due to the lack of relevance of advertising. For example, you are bidding for "cream for men", but this term can mean anti-itch cream, anti-wrinkle cream, dry skin cream, and other creams. Moreover, buyers who are looking for "cream for men" may not know what product they are looking for.

Amazon advertising cost-to-sales ratio, Amazon advertising cost settlement

Amazon advertising cost settlement

Amazon is the third largest advertising platform, providing effective advertising for more than one million sellers to promote their products and brands to shoppers inside and outside the site. If you plan to advertise on Amazon, you need to know your advertising cost of sales (ACoS). ACoS measures the ratio of advertising costs to sales revenue, that is, the ratio of your company's advertising expenditure to the revenue derived from advertising. You can use the ACoS formula to calculate the cost of advertising sales: advertising expenditure / advertising revenue * 100.

When it comes to ACoS on Amazon, you not only need to understand how to calculate ACoS, you also need to know more. You also need to understand the break-even point, because this number will help you build cost-effective advertising campaigns and pricing models. What is ACoS

ACoS is also called advertising cost of sales. It uses the following formula to measure the effectiveness of Amazon advertising campaigns: ACoS = advertising expenditure/advertising revenue*100. With ACoS, your company can see how much you spend on Amazon advertising, and how much do you spend? Make money from it. How to calculate ACoS
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