If you saw Amazon, investing in Amazon ads is a great way to help boost sales of your products, but as with any investment, there’s a cost, which is why I’m here to tell you all about what you can expect to pay for your Amazon ads. And it’s not as much as you may think. I’ll also go over how Amazon ads works and a few ads you might want to try for your business. Keep watching to learn more.
Before I get into the cost of Amazon ads, let me outline two types of ads you can use. These aren’t the only ads available on Amazon, but they’re certainly great options for businesses. First are sponsored products ads. These ads look like a typical product listing in the Amazon results page, except they’re labeled with a tag that says they’re sponsored. When someone clicks on the ad, they see the full product description, images and whatever other information you include with your product. Second are sponsored brand ads. You can see these ads as a headline above to the left of or below the Amazon search results. They include your brand’s logo and up to three products. These ads can connect users to your Amazon storefront or your product listings when they click on it. Both sponsored products and sponsored brand ads use a cost per click or CPC model, which means you pay every time someone clicks on your ad to use sponsored products or sponsored brand ads, you need a minimum daily budget of one dollar. OK, here it is.
How much do Amazon ads cost? It depends. Wait, wait, don’t go. I have numbers. While Amazon’s cost per click can vary, industry pros tend to place it under one dollar. Since Amazon uses a bidding system to determine when ads show up, this will fluctuate based on what you’re targeting and the competition when it comes to your overall budget. There’s a big range since this is based on what your business is wants to spend, but it could be anywhere from one hundred dollars to fifty thousand dollars each month. Not saying that you can’t go over or under that. Plus, if you partner with an agency, you can expect to invest a little more for things like copywriting, product, photography and optimization. The overall cost really depends on how competitive you want to be when planning out your ads. You should also focus on your advertising cost of sale or accosts. Ecorse deals with your Amazon return on investment anyway. Ecorse is a calculation of how much you spend on Amazon ads as a proportion to how much you make from your ads. If that doesn’t make sense, here’s an example of more numbers.
To find your accosts, you would divide your ad spend by your sales revenue from your ads and then multiply that number by one hundred. So if you spent five thousand dollars on your ads and made fifteen thousand dollars in sales revenue, your cost would be about thirty three percent. This means that your ad spend makes up about thirty three percent of your Amazon sales revenue. So the lower the percentage the better. You definitely don’t want your cost to exceed one hundred percent or even be near one hundred percent. That means that your ad spend is close to or greater than your revenue from that ad. And you may need to rethink your campaign or partner with a team of Amazon experts to rethink it for you. You also don’t want your cost to exceed your profit margin. The cost formula doesn’t factor in things like production costs and other fees. So it’s important to keep track of how much it really costs to sell your products. If you have a profit margin of twenty percent and your cost is twenty five percent, you’re losing money. You might just start off with a low cost. But if you optimize your ads well for your target audience, you can see improvements and take home more of your ad revenue. At the end of the day, what you do with that revenue is up to you.
Adopt a company costs, invest in more ads, get matching shirts for all of your employees or pay your bills. It’s your business and I’ll leave that decision up to you.