Making revenue is crucial for every business as well as getting new clients regularly. If you want to stay profitable and promote your product, you need to find your break-even Advertising Cost of Sales and try to lower it step by step.
Previously, we show you how to calculate this metric and why it is so important. Today it’s time to learn how to lower Amazon ACoS.Previously, we taught you how to calculate this metric and why it is so important. Today it’s time to learn how to lower Amazon ACoS to see the first results as soon as possible.
Why does ACoS matter?
Advertising Cost of Sale it’s the main metric in the marketplace. It shows how much you spend on your pay-per-click campaign to earn $1. If it is higher than a margin, you lose money. If it equals the profit, you hit the break-even point. But your main goal is to have a maximum profit from every sale. That’s why you should try to reduce ACoS on Amazon.
The problem of high ACoS
Firstly, find your break-even ad cost of sale. It’s the situation when you don’t earn anything, but don’t lose any money. It’s enough for your business to operate and promote crucial goods, but now to grow. Sponsoreds tools help you find these metrics in a few clicks.
Build on your marketing strategy considering those numbers. If you want to lower ad costs of sales with minimum effort, use AI-based optimization tools like Zero to Hero or Automation. They revise and adjust your keywords and bidding strategy, which lowers ACoS on Amazon PPC campaigns. But also you could do this by lowering the cost of production or setting a higher price on your goods.
High ACoS is okay for launching and ranking
If you have a pretty high cost of sale which is near the break-even point or even slightly surpasses him, don’t worry. In some situations it’s OK. Check if your business falls into some of these categories:
- Seasonal products. Swimsuits, Christmas sweaters, etc.
- New goods. You add them to your shop less than a month ago.
- Innovations. Users tend to use the same goods even when they have better and cheaper alternatives.
- You run the campaign in high season. There is competition in your niche, so everyone involved pays more than usual.
If your situation fits one of those scenarios, be cool. Everything is fine, you have nothing to worry about. But if it’s not, try to reduce ACoS (ad spend)on Amazon with the next tricks and lifehacks.
How does ACoS influence the ROI of your Amazon business
ROI ratio measures returns of investments. It shows how much profit or losses some investments make after considering their cost. So it has related nature to the ACoS, which measures how much you spend on ads to earn $1.
The less your cost of sales, the better ROI you have. But why? You earn more than you spend. So, it’s the return on your investments. Use Amazon PPC audit tools to keep track of your campaign. Try to achieve the lowest possible cost of sales because it will help your business stay profitable.
How to lower Amazon ACoS: best tactics
The key to success is to stay profitable even in turbulent times. It’s hard to change product prices or FBA fees. But it’s conceivably to modify marketing strategies. Here are ways what you could do and how to reduce ACoS only with marketing tricks:
- Optimize keywords. Stop spending so much money on keywords that don’t give you any profit. You can check every key manually, or save time and give this job to AI-based tools. Sponsoreds software automatically finds best-performing ads and boosts them, turning off the worst-performing ones.
- Improve bidding strategy. Pause, adjust the bid, or turn off keywords that are irrelevant to you at the moment. Sponsoreds Automation tool finds the most suitable decision and changes the bid by itself.
- Look for keywords with low impressions but fine CTR. Don’t block ads with low impressions but high total Click Through Rate. Find them with Amazon PPC tools. Try to give them bids as high as for your most performing ads. If they still have conversions, keep them. It will lower your ACoS. But if they don’t perform as well as you want to, modify the bids back.
- Optimize product listings. They are such important as ads. Correct listing could boost sales. It gives you profit, which ultimately lowers the cost of sales. Change your title to be more consistent and relevant to the actual goods. Test different A+ content (photo, video, description). Avoid cliches like “best in the whole market”, “long-lasting”, “like an example for others”, “free shipping”, etc. Check your reviews and give answers to the frequently asked questions on the product page.
- Look for competitors. Keep an eye on their strategies, and find ideas that you can bring to life with your business. Check their reviews to see where your competitors are frustrating and take this spot.
Conclusion
ACoS It is the key metric for any seller. You should keep track of it, and constantly change marketing tactics to stay profitable. It’s kind of exhausting to do it by yourself. That’s why you should use AI-based tools which help you to set up and automize any PPC campaign.
Try Sponsoreds Amazon software and you will see how it finds the most suitable keywords and sets campaigns with them, adjust bids, and gives you recommendations about A+ content and how to win a competitor’s race. Yes, you will have it all in one place! Moreover, it works 24/7, and even on federal holidays.
Try Sponsoreds Amazon software and you will see how it finds the most suitable keywords and sets campaigns with them, adjust bids, and gives you recommendations about A+ content and how to win a competitor’s race. Yes, you will have it all in one place! Moreover, it works 24/7, and even on federal holidays.
