Amazon PPC (pay-per-click) lets you pay to appear in Amazon search results and on product pages. You are charged when a shopper clicks, not when your ad is shown. This guide covers what U.S. sellers should know before spending a dollar, and the routine that keeps spend under control.
1. Fix the listing before you buy traffic
Ads send shoppers to your listing. If the listing is weak, you pay for clicks that don't convert. Before launching, check:
- A title that says what the product is, with the main keyword near the start
- A clear main image and a full set of secondary images
- Bullets that answer the questions buyers actually ask
- A competitive price and reliable stock
- A rating and review count shoppers trust
Rule of thumb: if you wouldn't buy from your own listing, don't advertise it yet. Our Amazon management service starts with exactly this audit.
2. Know your break-even number
ACoS is ad spend divided by ad-attributed sales. Your break-even ACoS equals your profit margin before ad spend: if a product earns 30% before advertising, you break even at 30% ACoS. Launch campaigns may run above that on purpose, but every product should work toward profit. Also track TACoS, which is total ad spend divided by total sales (ads plus organic). It shows whether advertising is building the business over time.
3. Understand the ad types
- Sponsored Products: ads for single listings in search results and on product pages. Start here.
- Sponsored Brands: banner and video ads that feature your brand and several products. They require Brand Registry.
- Sponsored Display: product-page placements and retargeting, useful once the basics work.
4. Build a simple campaign structure
- One automatic campaign per product group, to discover the terms shoppers use
- One manual exact-match campaign for proven keywords
- One phrase or broad campaign with lower bids, for testing new terms
- Clear campaign names so reports are easy to read
Keep products with different margins and prices in separate campaigns.
5. Keywords and negatives
Automatic campaigns show what shoppers really type. Each week, move converting search terms into manual exact-match campaigns, and add terms that spend without converting as negative keywords. This weekly clean-up is where most wasted spend is saved.
6. Bids and budgets
Amazon's suggested bid is a reference, not a rule. Start modestly, give each keyword enough clicks before judging it, and change bids in small steps. Raise bids on terms that convert under your break-even ACoS, and lower or pause the rest. Set daily budgets so your best campaigns don't run out before the day ends.
7. The metrics that matter
- Impressions and click-through rate: is the ad seen and clicked?
- Conversion rate: do clicks become orders?
- ACoS and TACoS: is the spend profitable?
- Organic rank on your main terms over time
8. A 20-minute weekly routine
- Review search terms; add winners and negatives
- Check budgets and campaigns limited by budget
- Adjust bids on strong and weak keywords
- Confirm stock on advertised products
- Write down what you changed, so you can learn from it
Common mistakes
- Advertising out-of-stock or badly priced products
- Mixing different products in one campaign
- Judging a keyword after a handful of clicks
- Watching ACoS alone and ignoring organic sales
- Changing everything at once, so you can't tell what worked
A worked example (illustrative numbers)
Imagine a kitchen product priced at $30. After the cost of goods, Amazon fees and fulfillment, $12 is left before advertising, which is a 40% margin. That makes break-even ACoS 40%. An automatic campaign spends $200 and produces $400 in sales, so ACoS is 50%, above break-even. The search-term report shows two terms drive most of the sales and six terms spend money without a single order. The next step is to move the two winners into an exact-match campaign, add the six as negatives, and review again after enough clicks to see a pattern. The goal of that round is to bring ACoS under 40%, not to hope the number improves by itself.
How to scale without losing profit
- Raise budgets first on campaigns already under break-even ACoS
- Add new keywords in small batches so you can see which ones work
- Add Sponsored Brands once Brand Registry is approved and your creative is ready
- Defend your own brand-name searches, where competitors may try to appear
- Check inventory before every budget increase; ads on an out-of-stock product waste money and hurt ranking
Questions sellers ask
How long before I can judge a campaign?
Judge keywords by the number of clicks, not the number of days. A term with only a handful of clicks tells you very little. Give each keyword enough data to show a pattern before cutting or raising bids sharply.
Should I switch ads off when my organic ranking is strong?
Not automatically. Ads can protect your position against competitors. Check whether the spend on that term still earns a profit, and compare ACoS with TACoS before deciding.
Is automatic or manual targeting better?
Use both. Automatic campaigns discover what shoppers search. Manual campaigns give you control over bids and keywords for the terms that already work.
My ACoS is high but my TACoS is falling. Is that bad?
Not necessarily. Ads may be lifting organic sales too. Judge both numbers against your margin and your goal, whether that is launch growth or profit.
Next step
If you want a second pair of eyes on your account, contact us with your products and goals. You can also read how we plan Q4 on marketplaces and how Amazon, Walmart and TikTok Shop compare.