Amazon Sponsored Products or Pay-per-click (PPC) ads is a great way to promote your products and drive sales. However, it comes with a cost, and that cost is called the ACOS (Advertising Cost of Sales). The ACOS is calculated by dividing your ad spend by your sales revenue. For instance, if you spend $10 on Amazon ads and generate $100 in sales, your ACOS is 10%. While a high ACOS may be fine if your sales are great, it’s not sustainable in the long run. A high ACOS means you’re overspending on your ads and not seeing the return on investment you need to grow. Here’s how to lower your ACOS using the following tips.

Use Negative Keywords

One of the most important things you can do to lower your ACOS is using negative keywords. Negative keywords are search terms you don’t want your ads to show for. For example, if you sell vegan protein powder, you don’t want your ads to show when someone types in “whey protein powder” because it’s not relevant to your product. Adding “whey” as a negative keyword will help you avoid spending money on irrelevant clicks, which costs you money and causes your ACOS to skyrocket.

Optimize Your Keyword Bids

Another way to reduce your ACOS is by optimizing your keyword bids. Keyword bids are the amount you’re willing to pay for a click on your ad. If you’re bidding too high, you’re likely to get clicks that are not profitable, leading to a high ACOS. By lowering your keyword bids, you’ll not only reduce your ACOS, but you’ll also save money on clicks that don’t convert to sales.

Improve Your Product Listing

The quality of your product listing can significantly impact your ACOS. A poorly written or unclear product listing can lead to unqualified clicks, which can affect your ACOS. Your product listing should be informative, easy to read, and include high-quality images and relevant keywords. By improving your product listing, you can increase your click-through rate (CTR), which can lower your ACOS and boost your sales.

Optimize Your Campaign Budget

Optimizing your campaign budget is another way to reduce your ACOS. If you’re working with a limited budget, it’s crucial to ensure that your ad spend is allocated to your best-performing campaigns. Start by finding the campaigns with the lowest ACOS and increase their budget. Additionally, pause campaigns that aren’t generating any sales or have a high ACOS. By optimizing your campaign budget, you can get the most out of your ad spend and maximize your return on investment.

Track Your Performance Metrics

Finally, tracking your performance metrics, such as CTR, conversion rate, and total sales, is essential to reducing your ACOS. By analyzing your performance metrics, you can identify which campaigns, keywords, and targeting options are producing the best results. Use this information to optimize your campaigns and make strategic decisions that will help you achieve your business goals while reducing your ACOS.

Conclusion:

Lowering your ACOS requires a strategic and data-driven approach. You need to focus on your campaigns, product listings, keywords, and budget to ensure that you’re getting a good return on investment from your Amazon ads. Remember to use negative keywords, optimize your keyword bids, improve your product listing, optimize your campaign budget, and track your performance metrics. By following these tips, you can reduce your ACOS, increase your sales, and achieve success on Amazon.