Amazon ACoS and strategies - Learn Online

Amazon ACoS and strategies for optimizing ad profitability

Lesson Details:
May 12, 2020

Video Transcription: In this video we're going to talk about something very important and that is you see this AC o s field this video is brought to you by Appy Pie Academy you see I have an AC OS field ranging from something like 12% which is some people would say that's very good to something like 98% some people would say that's very bad what is it how can we control it how does it impact our sales let's talk about all this now a cos stands for advertising cost of sales so basically what it means is how much did it cost you to make that sale in ads how much did you have to spend in ads of that sale and it's a percentage so obviously if it cost you a hundred percent then you made no profit in fact you made a loss right because if you're selling something at ten dollars if you spend ten dollars to sell that $10 item then it's a hundred percent a cos it doesn't work because you have to make the item you have the materials so basically you need a lower a cos that's the idea usually usually so most people would say lower a cos is good and that's true if you just are looking at the one transaction if you're looking at one transaction of course you want to spend less money to sell the item it's a no-brainer but the trick is actually not that the trick is really sometimes you actually want higher a cos I'm okay you saw that I have a hundred percent almost a cos I'm okay with it when is that okay because when I have a higher a cos that means I'm bidding higher on more products which ultimately means I'm making more overall sales so if I'm making more overall sales but each sale is at a smaller profit I can actually still be more profitable now let's go over a very easy example to illustrate this let's say you're selling something and you have a low a cos okay and you're profiting $10 per every sale that's good if you raise your a cos you run higher costing ads and you start to only make $1 per sale so your profitability per sale goes down no-brainer very clear but you see that the trick is that you can be more profitable in the second case with the higher a cos because it allows you to make more sales aha you see you can make more sales and because you make more sales you'll get more reviews you'll get more engagement and that might help you grow inside organic Amazon search and get organic sales so ultimately even though per item sales might be less profitable your overall business will have much more volume will drown out competitors will build a stronger brand will have more customers who bought it and recommended it to friends none of that stuff is counted in the immediate a cos in the single item transaction you see that's why looking at it is that limited so that's why I'm not worried if I have a hundred percent a cos and I run some ads at a loss I'm not really worried in my case because I'm looking long-term see that's what I'm doing now let's go over a couple of examples for how to lower your a cos per item I've call these a few strategies first is bid on non-competitive longtail keywords so for example if I have a marketing book the word marketing would be a competitive keyword but I if I but a keyword like Instagram marketing for beginners that's way less competitive than just the keyword marketing so sometimes a part of having a lower a cos is just finding low volume key words that are not competitive so you can bid very low on them that's a totally fine strategy another strategy is to simply focus on the sales conversion rate of your sales page that your product listing page can you have better reviews on it can you have better testimonials can you have a better description can you have a more exciting set of photos you have a better title all those things will entice the person to buy and of course you'll have to run less ads to cause sales and so it will be more profitable immediately and when Amazon starts seeing that your listing is a profitable listing it's making more money and people are buying at a higher rate it's going to sometimes give you lower ad rates then competitive products that aren't as highly converting because Amazon seems that yours is more profitable and we talked about this in the course we talked about how to make your page highly converting and I show you hands-on another strategy is to start bidding low maybe too low on some competitive keywords and slowly waiting waiting waiting until you gather enough data and seeing ok like maybe you're not at a low a cos maybe you're not making enough sales so you raise maybe your bid by five cents or cent and then you wait a week and then you see are you making more sales is it more profitable and you kind of adjust your bids over time and gather data so that over time you can see at which bids were you getting the more sales and the most optimal a cos that had the best combination of total sales and profit per sale ultimately earning you the most revenue and of course there are some tools for this for finding like non competitive keywords one such example that you can use for free is helium 10 you can find you a number of longtail keywords to bid on that are not competitive so right away you can get ideas and this has free and paid versions so you can see the free plan is only zero dollars so you can try it for free and then of course it gets a little bit more expensive if you want to upgrade but at least in the beginning you can give it a try to see if it makes you more money and if it makes you more money this might be worthwhile and if it doesn't at least try it with the free version and see if it works for you there are plenty of such tools but this is one that's a pretty good tool so now you know what's a cos when you should have it lower when you should have it higher and some Optima Asian strategies.

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