Amazon PPC Bid Calculator User Guide
Step 1: Enter product details
To get started, enter the following:
- Selling Price: The price you are selling the product for (or aim to sell it for).
- Landed Cost: The total landed cost of goods sold (COGS) including manufacturing, shipping, and import taxes and duties.
- Amazon Fees: The total amount Amazon takes for each sale including the referral fee (usually 15%) and fulfillment fees.
Step 2: Define conversion rate
Next, use the conversion rate slider to pinpoint your current or target conversion rate.
To find your conversion rate on Amazon, head to:
- Reports >
- Business Reports >
- Detail Page Sales and Traffic By Child Item…
- and find the value under ‘Unit Session Percentage’
Or manually calculate it by entering your total traffic and sales into our conversion rate calculator below:
Step 3: Action your results
Once you’ve entered your product and conversion rate data, you’ll get four results:
- Net Profit: The estimated amount of profit per unit sold in dollars. This doesn’t consider wider business expenses and is a simplified per-product profit estimate.
- Breakeven ACOS: The ACOS (advertising cost of sales) at which point this product’s Amazon PPC spend would be breakeven. In other words, if you hit this ACOS your advertising spend won’t be making or losing any money. This is a helpful metric as many Amazon sellers seek to break even with their Amazon PPC campaigns to drive organic ranking and profit from the resulting sales. Note: This % figure is also your net margin.
- Average Clicks Per Sale: The average number of clicks you need to generate to get a sale. This is calculated from your conversion rate.
- Max Bid For Breakeven: The maximum bid you should enter if you want to be profitable based on all other metrics given. This then becomes your target PPC bid when creating new campaigns.
Things to consider:
- Max Bid vs CPC: Due to the Amazon PPC auction system, your maximum bid will differ from your actual cost per click. The ‘Max Bid For Breakeven’ metric is designed to guarantee you at least breakeven (assuming your conversion rate stays the same), but will often result in a positive, profitable outcome.
- Bid Levels & Impressions: Decreasing your maximum bid may cause you to lose impressions if the majority of your competition is bidding higher than you. While this may save you ad spend, it could also decrease your average monthly revenue. These metrics should all be considered fluid and be continually monitored to find the right balance.
Given the above and depending on the maturity of your product, you may look to adjust your bid up to account for a lower ending cost per click.
This is especially true during product launches where the priority is establishing organic rank in the short term to product profit in the long term.
Frequently Asked Questions
THE ECOM MEMO
Stay eCommerce sharp in 5 minutes per week