A lot of Amazon sellers are wondering if PPC is worth the cost. It’s a great question, especially since there is so much competition on Amazon. The answer to this is up for debate, and it really depends on your product category, what you’re selling, and how well-known your brand is.
There’s always a question about whether or not Amazon PPC is worth it. We are going to discuss that in this article.
What is Amazon PPC?
Amazon Product PPC, or Pay-Per-Click advertising, is an ad format on Amazon that allows sellers to show their products through sponsored product ads. When a customer clicks on the ad and goes to your listing page, they’ll also see other sellers’ ads alongside yours.
This allows you to compete with other similar products, which can help your conversion rate increase significantly.
When it comes to the cost of advertising on Amazon PPC, it all depends on how much traffic you are getting from other sources like organic search results, your sponsored products advertisements, and others.
Since these directly affect your visibility, it makes sense that having lots of traffic will reduce the chances of showing up on Amazon’s organic search results pages (or SERPs).
You can check more here: What is Amazon PPC?
Is Amazon PPC Worth It?
That’s the million-dollar question, isn’t it?
There are many factors that affect PPC campaigns and whether or not they are worth it in the end. You need to be comfortable with how you spend your advertising dollars during these specific times.
When making this decision, there’s a lot of information you’ll want to consider:
How much it costs per click?
Typically on Amazon, most sellers see CPCs between $0.20 and $2.00 (though some can go as low as $0.10). This means that for every time someone clicks on your ad (or “impression”), you get charged anywhere from 20 cents to $2, depending on what type of items you’re selling.
What is your competition?
Before you even decide to place that ad on Amazon, you’ll want to be able to sell something similar and make sure there’s enough demand for it. Otherwise, why would you spend more money on advertising? You wouldn’t want to advertise a product if it were going to cost $1 per click and no one was buying it!
What are your margins like?
If the competition is crazy and you’re still not seeing a return on investment (ROI), then it’s best to stop advertising.
You may be selling at a loss if there is no demand for your product, and people don’t even want to click on your ad. We wouldn’t recommend that, but we can say that Amazon PPC isn’t going anywhere anytime soon. It’s here to stay!
As of right now, it seems that most sellers have been able to find success with their Amazon PPC campaigns.
Why You Should Think About Advertising on Amazon Now?
Because of the growth rate in the e-commerce industry as a whole, more and more people are shifting away from shopping at standard brick-and-mortar stores.
Over the past five years, e-commerce sales have increased from just about 9 percent of total retail sales to nearly 15 percent in 2017. It shows no sign of slowing down anytime soon! This has made it very competitive to sell on Amazon compared to other platforms.
How long does it take for Amazon PPC to work?
If you are starting with Amazon PPC, it might take time before your campaign shows more traffic.
However, if you’re already getting steady organic sales and have plenty of keyword rankings on the first page of Google, then your amazon PPC cost might start paying off sooner since people will naturally go to your product pages without having to pay for clicks.
How much does Amazon PPC cost?
Amazon charges by impressions (how many times an ad is shown), not clicks or conversions. That means that even if someone sees your ad but doesn’t click on it, you still get charged for that impression!
There’s also a minimum bid price for each product, which tells Amazon how much they can charge for your clicks. If you bid below the minimum price, you will be charged per click as usual, but this will cost more than other bids placed above the minimum.
In short, Amazon PPC might work wonders in some product categories. Still, it’s definitely harder to get in front of people on Amazon since everyone is bombarding them with ads when they search for certain items.
How much should I budget for PPC?
Amazon recommends setting aside at least $100 per month to get started on PPC.
Depending on the cost and success of your campaign, you might need to increase or decrease this budget as time goes by.
We recommend taking some time to find out how much Amazon is willing to charge for clicks on your product before settling down with that limit so you won’t be surprised later on. Remember, it’s going against the other sellers in your category, so more money doesn’t mean you’re guaranteed to show up first in their search results.
What is a good Amazon PPC conversion rate?
Amazon doesn’t provide conversion rates, so the only way to find out the best rate for your product category is through other sellers.
The first thing you can do is get inspiration from other products that are already getting traffic on Amazon. Then, check their PPC cost per click and use this as a benchmark to set your own bid prices.
Amazon PPC might be worth it if you’re selling a popular product or category. It’s not very cheap, but getting high rankings on Amazon organic search results can take months of hard work, and that’s why many people prefer paying for instant traffic.
We hope we could answer your question in this article; feel free to drop a comment if you have other questions or are unsure about anything.
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