Are these 3 Amazon PPC mistakes killing your profit?

What’s the true goal of selling on Amazon?

Hint:

It’s not what the media says.

The media celebrates “million dollar sellers”.

People who post screenshots of the Amazon Seller app showing $10k revenue days get likes and comments.

But you know what?

These are topline revenue numbers.

It’s not real profit.

Over my 7 years of doing this, I’ve seen many Amazon sellers with great revenue but almost no profit. They’re broke! They make just enough to re-order inventory. It’s bad out there.

What people don’t talk about:

Amazon FBA businesses have lots of costs that can kill profit. COGS, FBA shipping fees, customer returns, Amazon warehouse fees, Amazon referral fees, and the one I’ll talk about today: Amazon PPC.

Amazon PPC is like fire.

When controlled, it can heat your house and cook your steak to a juicy medium rare.

But uncontrolled, it’ll burn the house down (and not in a fun, Talking Heads sort of way. Just pure carnage).

Here’s 3 “burn the house down” cases to avoid when running Amazon PPC (credit goes to Amazon brand owner Bryan Porter of SimpleModern for articulating these insights):

(1) Branded search artificially inflates performance. Your Amazon Ads (especially Auto campaigns) will start running for terms involving your exact brand name (e.g. if you’re the brand YETI, you’ll have your ads show up when people search “YETI” on Amazon). If you’re a larger brand with people searching for your stuff, this can rack up a PPC bill. Don’t get me wrong: you will get sales from those ads at a good ACoS. But, there’s a good chance those folks (if they’re familiar with your brand) would scroll past any competitor ads and buy your stuff from organic results. You’re trading revenue for actual profit.

(2) Defensive product targeting. There are tactics where you buy ad space on your own Amazon listings (below the fold, in the “Sponsored products related to this item” section). This will make sure that shoppers jump from your listing to your other listings. And again, you’ll see a good ACoS. But, this may also be unnecessary spend. Once again, you’re trading revenue for actual profit.

(3) Cannibalization of organic sales. If you’re organically ranked #1 for a keyword (which is the goal of this whole game!), it doesn’t make as much sense to run ads for that same term as well. You’re probably “overpaying” at that point. This, too, is trading revenue for actual profit.

^ all 3 of these are common Amazon Advertising strategies. And their ROAS (return on ad spend) will look good. It’s misleading. The revenue will look great. But they may eat into profit if not controlled directly.

This is the kind of Amazon Ads nuance we’ve spent the last 5 years thinking about.

Amazon Ads is all we do.

So, if you want a partner to join your business and act as an extension of your team, run your Amazon Ads, and produce more bottom line profit, let’s chat.

Here’s the link to book a time with my team to discuss working together:

https://calendly.com/asteroidx-chat/eval

At the very least, you will come away with a customized plan to improve your bottom line using Amazon Ads.

There’s still a 10-day window to capitalize on the Q4 holiday rush. And you can bet we’ve got a great playbook waiting for you, there 😉

https://calendly.com/asteroidx-chat/eval?from=slack