In today’s e-commerce market, Amazon is a giant. But these days, people don’t just use Amazon to buy products online. They also use it to compare prices, find new products, and start new product searches.

In this post, we’ll walk you through the six actionable tips that can help you start building a profitable Amazon marketing strategy.

Choose Your Amazon Seller Account

Setting up an account on Amazon is easy, but attracting prospective customers on your page is what makes it complicated.

However, the platforms do most of the work for you, bringing in traffic, and prospective buyers to your listing.

So how do you create an Amazon account? First, go to Amazon Seller Central and hit the “Start Selling” button. It is also the place where you’ll be managing your selling account.

After creating your account, start listing your products on Amazon. If you went with the Individual Plan, you could opt to place one product on the Amazon Marketplace catalog at a time.

Meanwhile, if you went with the Professional Plan, you can add batches of products in the catalog.

Learn How Amazon Ranks Ads

About 50 percent of the online transactions in the US happens on Amazon. However, a lot of sellers and manufacturers are struggling to understand how their products will be visible to millions of users on the platform.

The Amazon Ad Rank formula is a combination of factors and ranking algorithms that significantly affect your business’ success in the world’s biggest marketplace.

Here’s how the formula goes: Ad Grade x Cost-Per-Click Bid = Ad Rank Metrics

This formula will help determine the rank of your ad. It also further divided into two categories:

Performance Metrics

  • Conversion rates
  • Overall sales
  • Click-through rate

Relevance Metrics

  • Title of the Product
  • Product Description
  • Seller Name
  • Search Terms

Amazon PPC works like an auction. Therefore, it takes into consideration your bid first before ranking you. If your products don’t receive an excellent ad grade, then you need to bid higher so that you can rank.

Learn Paid and Organic Traffic

Amazon SEO and PPC are two of the most important aspects if you want to boost your product visibility and sales on Amazon. But you can’t just rely on Amazon PPC if you don’t have a listing that’s well optimized.

If you send people to a listing that isn’t optimized, then your ads will likely fail. These paid traffic strategies won’t succeed if you don’t have the right fundamentals for a listing that’s highly converting.

So how much money do you need to put on paid ads and how much effort do you need to place on organic traffic? Well, it usually depends on your brand’s goals. Moreover, prioritizing one aspect doesn’t mean that you’re abandoning the other.

Meaning, if you’re trying to rank organically and don’t put much effort into organic traffic, then that will only make the optimizing process for Amazon ads much easier once you start focusing on paid traffic. It also helps if you work with the best Amazon marketing agencies out there.

Learn About Advertising Cost Over Sales (ACoS)

Advertising cost over sales, also known as ACOS, is the number of sales that you got from Sponsored Brands from your ad campaign. This is usually calculated when you divide your total ad spend with the total sales that you get from advertising.

For instance, if you spent two dollars on advertising, and those ads cost you sales worth $20, then your ACOS is 10%.

Knowing what your ACOS is will help you know whether your campaigns are effective or not, which is relative to your ad spend. If you have a lower ACOS, then it means that you’re spending just a small amount of sales on advertising.

Get Familiar with Amazon PPC Terminologies

Familiarizing yourself with these Amazon PPC terms may take some time, but we’ll discuss a few Amazon PPC terms that you might encounter along the way:

  • Campaigns: Where you’ll set the details for your PPC campaigns. It has two types: Automatic and manual campaigns.
  • Automatic Campaigns: Amazon will automatically pick the keywords to target based on the listing information of the product.
  • Manual Campaigns: The seller picks the keywords that the ads will target.
  • Impressions: The total number of times your product ads appeared for a particular search query that matched your ads’ target keywords.
  • Clicks: The total number of times users clicked on your product to see the product detail page.
  • CTR: The ratio between impressions and clicks.
  • Average Cost per Click: The average amount you’re charged for a product ad on Amazon.
  • PPC Spend: The money you’ve spent on advertising for a keyword.
  • Same SKU: The product that’s associated with the original product page that was clicked.
  • Other SKU: When users have clicked an ad for one of your SKUs, but the bought another of your SKUs.
  • Conversion Rate: The total number of users that have visited your listing over the number of people who bought your product.

Decide Between Self-fulfill or FBA

You would then have to pick whether you choose to self-fulfill or let Amazon take over your customers’ orders.

Self-fulfilled orders can still benefit from low postage rates by utilizing Amazon’s approved carriers. Meaning, if a person buys from you, you can print a pre-paid postage label on your account. If not, you can pick the carrier that you prefer and postage labels.

Meanwhile, Fulfilled by Amazon (FBA) is a type of service where Amazon warehouses, ships, and handles all customer-related concerns on your behalf.

It’s open to all sellers, whether you have a professional or individual seller account. When you decide to utilize Amazon’s FBA services, then you need to send a couple of stocks of your items to Amazon’s warehouse.

Final Thoughts

Over the last 25 years, Amazon grows into what it is today. It welcomes about 2,000 new sellers daily.

But whether you’ve been selling on Amazon for years or you’re just starting, it can be a daunting online marketplace.

By applying these tips in your own Amazon marketing strategy, you’ll be able to build a profitable business in the long run.

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