E147: Amazon PPC Strategy – Step by Step Guide on Saving Thousands of Dollars

Monday, May 21st, 2018 in Podcast

While Amazon PPC is one of the most important tools for any Amazon seller, it’s also one that’s very expensive. It can potentially drain your profits if left unchecked.

Case in point: In January we spent roughly $33,000 on Amazon PPC, generated sales amounting to around $104,000, with ACOS at 30%. Deducting Cost of Goods and other Amazon fees, we incurred a net loss of $537.

You might ask what’s the point of running ads if it’s a loss anyway, and the answer is what I call the “Amazon flywheel effect”. It’s okay for me to take a hit on profits if it means getting more traffic and better conversions, because in the long run it will get me better search positions, in turn driving more sales.

While I’m generally okay with this, it would be nice to get the same results with a little less money–even if just to break even. So early this year I decided to sit down and take a good hard look at our PPC campaigns and see if there’s something we can do to save some money here and there. What resulted is an Amazon PPC strategy that after a couple of months of implementation resulted in the rough stats below:

Spend: $25,000
Sales: $103,000
ACOS: 24.1% and dropping
Net profits: $6000

Yes, you read that right. We actually gained profits when we implemented this Amazon PPC strategy. The beauty of it is this strategy does not require you to monitor PPC campaigns all the time. You don’t even have to do this yourself. We assigned one of our Filipino VAs to this task and it just takes her a couple of hours per week.

One of the tools that hugely helped us achieve this is Sellics. We trained our VA and taught her how to use the software and it has helped her drastically reduce the time needed to monitor our PPC campaigns. Click here to explore Sellics (affiliate link).

In this episode I discuss how we were able to do this and how you can do it too. This episode is quite technical and we might do a screencast in the future to better explain the numbers in our Amazon PPC strategy. Subscribe to our Youtube channel to get updates.

Resources mentioned:

Million Dollar Sellers
Sellics (affiliate link)
EcomCrew Youtube channel

Thanks for listening! If you have any questions, feel free to comment below.

Michael started his first business when he was 18 and is a serial entrepreneur. He got his start in the online world way back in 2004 as an affiliate marketer. From there he grew as an SEO expert and has transitioned into ecommerce, running several sites that bring in a total of 7-figures of revenue each year.


14 Comments

  • Derek
    Reply

    Hey Mike—great episode bro. I also use sellics and absolutely love it. One question about your strategy. When you launch an Auto PPC campaign and let her run for that first 6-8 window do you optimize it with the Sellics optimization triggers from the start or do you wait until that window is done and then turn on the optimization? Same question for manual? Optimize from the get-go or let the algorithms dial in before touching the campaigns?

    Thanks again—absolutely loving the podcast and everything you are putting out.

    Dave Bryant
    Reply

    Speaking for Mike here a little, I believe both of our strategies overall is to let Sellics (or even Amazon for that matter) run it’s course for 6-8 weeks and then start toying with optimizing.

    Michael Jackness
    Reply

    Derek,

    I set the auto optimization feature on the automatic campaigns from day 1, BUT it takes quite some time for Sellics to “kick in”, because it requires a minimum amount of clicks before it starts to optimize. So, it’s typically 4-8 weeks before any of that happens.

    Mike

  • Richard McLachlan
    Reply

    Really nice to hear you are doing well using our tool guys. Love your work.

    Dave Bryant
    Reply

    Thanks Richard!

    Michael Jackness
    Reply

    For sure Richard… I’m not sure how any Amazon seller gets by without Sellics!

  • Mike Kerstetter
    Reply

    Great episode! I’ve been running my campaigns on auto for years. I put in a few negative keywords, which helped decrease the ACOS. Other than that, I didn’t really adjust them. This process makes more sense.

    Quick question…I created an exact match campaign for each SKU, then I add multiple exact match keywords to that one campaign. Is that how you do it or do you create an exact match campaign for each individual keyword?

    Thanks, again, for the great information.

    Michael Jackness
    Reply

    Hey Mike – I create an Exact match campaign for each SKU, but I put multiple keyword in each Exact campaign. Sellics will the adjust the bids on each individual keyword up / down until it finds the best bids. I also mimic the Exact match with a Broad match as well. Hope this helps.

  • David Wilson
    Reply

    One additional benefit to Sellics is the way their pricing structure works. You do not have to pay per marketplace, so one account gets you all the features for every marketplace you add. I use Sellics to automate my Sponosred campaigns in USA, CA, UK, Germany, France, Italy and Spain.
    I feel their default automations are too aggressive, so intead I employ 10% bid increases/decreases. Also, I think pausing a keyword after 2X the expected clicks to achieve a conversion is a bit unforgiving, as keywords sometimes go stretches without converting, when in the longer run it is still a viable keyword.

  • John
    Reply

    Hey Mike

    I’m a little lost with my PPC and was hoping I might get your advice.

    I’m a huge fan of your white hat approach and have implemented a number of your strategies to launch a genuine 4.9 star product with 23 organic reviews in just over a month (4.9 because two of those reviews were 4 star ‘I love this product, it’s amazing… 4 stars!’ reviews… fml).

    People in my niche are definitely passionate about my product, but I kind of broke one of the launch strategy rules in that this is a completely new product. I designed it and as of right now it’s the only one selling on Amazon, or anywhere for that matter.

    It’s an accessory for an electronic product that sells about 300 units a day/$1mill revenue a month, in a niche I’m familiar with (hence I made my product, because I needed one) so rightly or wrongly I took a gamble that there was a market there for it.

    Now the launch hubbub has died down I’m working on strategies to sustain and build sales. One of those is PPC.

    I know the basics of PPC. I’ve set up auto-campaigns, exact match, phrase match, etc, but none of them seem to be really working.

    I don’t know if this is because of me, because I’m a novice and I’m doing something wrong. Or if it’s because my product is new, no one really knows what it is or that they even need it, so Amazon PPC is essentially like advertising to cold customers on Facebook, and I could throw endless amounts of money into PPC and no matter what I do it won’t make any difference.

    Do you think I’m wasting my time with PPC right now, would my money be better spent on raising awareness that my product actually exists through other marketing channels? Or am I missing something when it comes to PPC? I’ve tried doing product placement ads through my ams account on the product my product is an accessory too, but even that’s been like pouring money into a black hole.

    Any advice would be much appreciated.

    Michael Jackness
    Reply

    It’s really hard to say without knowing what the exact product is, but I’m having a hard time adding up a couple things you said.

    “It’s an accessory for an electronic product that sells about 300 units a day/$1mill revenue a month”

    If it’s a product in a niche that sells so well, then how come:

    ” Or if it’s because my product is new, no one really knows what it is or that they even need it, so Amazon PPC is essentially like advertising to cold customers on Facebook”

    John
    Reply

    Sorry for the confusion.

    The electronic device that my product is an accessory too is well established and sells those numbers.

    My product is a brand new accessory to that product. So no one knows what it is or even that they need it right now.

    Make more sense?

    Michael Jackness
    Reply

    Yes, it makes a lot more sense.

    In that case I would all but cut off Amazon PPC.

    It’s hard to create a market on Amazon; if people aren’t searching for it and understand it, then it’s a very very hard sell.

    I would just bid on a few keywords that might be working and call it a day.

    Take that budget, make a great video, and turn that into FB ads!

    John

    Thanks Mike.

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