Tips for Lowering your Amazon ACoS

For most Amazon sellers out there, achieving the ideal ACoS is a mammoth task.

Lowering the ACoS for PPC campaigns is one of their biggest pain points. So what can sellers do to achieve this? First, let’s understand what ACoS is and how to calculate it.

ACoS - Advertising cost of sale is defined as the amount of money you spend on advertising for every dollar you make. It is the ratio of the ad spend to the target sales generated. 

ACoS is calculated using this formula → ACoS = Total Ad Spend/ Total Sales. A good ACoS depends on your business goals and the strategies you use. An ACoS of less than 20% is said to be good. 

How To Lower Your Amazon ACoS?

Here are some tips on what you can do to effectively lower your ACoS:

Listing Optimization 

Simply running PPC campaigns is of no use. Side-by-side you also need to optimize the listings for the products that are being advertised. Directing your customers to listings that are not well optimized is only going to cost you money. 

You have to ensure your listings are optimized with all relevant keywords and can convert customers as this will reduce your ACoS. 

Your listings need to have a well-written copy for the description, amazon bullet points, title, etc. All the details of the products should be mentioned clearly so that any question a customer may have will be answered in the description itself. 

The dimensions, color, quantity, etc of the product should be clearly stated and as many product images as possible should be used. High-quality product images help in attracting customers’ attention. 

All these factors contribute to creating a listing that has the potential to persuade customers to make a purchase instead of just clicking on your ad and then leaving your listing without buying. Clicks should lead to purchases as this is what helps in reducing the ACoS.

Careful Selection of Keywords

Curate a list of keywords you want to use by also analyzing competitors’ keywords.

Broad-match keywords are known to be low converting so avoid spending money on those. Target keywords that are specific to your products or brand because this narrows down the traffic to your listing to customers who are more likely to follow through to make a purchase. This means more sales and a lower ACoS. 

Run an automatic campaign to first collect keywords from Amazon’s database and then use those keywords in your manual campaigns. 

This way, you don’t miss out on any good keywords since an auto campaign on Amazon scours for good keywords that sellers usually miss very easily. Thus, you only spend on keywords that matter. 

Use the Search Terms Report to gain a better understanding of what keywords to use by analyzing the data specific to ACoS. This will help streamline your keyword selection process. 

Use an Advanced PPC Campaign Management Tool

It is difficult to manage every aspect of your campaigns so sellers must enlist the help of advanced Amazon PPC analyzing tools. These tools are designed keeping in mind that sellers are looking to maximize their advertising profits. 

Seamlessly manage your campaigns by setting your bids according to your advertising budget and goals. Let the campaign manager take over and implement the best practices so that your ACoS is effectively reduced. 

With SellerApp’s automation feature you can choose from different rule sets for your campaigns to control your spending and manage everything advertisement-related easily. 

Budgeting According To Your Category or Niche 

Managing your ad spend or budget effectively is very important if you want to reduce the ACoS. You must ensure that you’re not budgeting too high or too low for your campaign. 

The amount depends on what type of product you’re selling or what category your product belongs to because the budget will vary accordingly. 

You need to budget in such a way that you succeed in communicating your brand message and spreading brand awareness while also not cutting back on your profits. The keywords you select for your campaign are another important factor because some keywords cost way more than others. 

It takes time for keywords to gain traction and for you to see some results, so take care not to overspend on your budget until you see some results because this will only shoot up your ACoS. 

Take time out to uncover keywords that generate clicks but not sales because those are the ones eating into your budget. Such keywords should be eliminated or paused and you should bid higher for the top-performing keywords. 

Constantly check up on your bids and monitor your keywords so that you can make changes accordingly over time. This helps you reduce any wasted amount being spent on your ads and lowers your ACoS.

Conclusion

While trying to lower your ACoS, there are several different ways to go about it. However, you should test these out one at a time to ensure what’s working and what’s not. Improvise on the ones that work for your campaigns and stick with them and don’t make too many changes at a time.

Author’s Bio

Arishekar N, Sr. Director of Marketing & Growth at SellerApp, is a specialist in digital marketing, in addition to website keyword optimization for search engines. His areas of expertise include enhancing the organic & paid ranking of webpages on search engines with innovative SEO & SEM strategies and online promotions.