Since Amazon opened seller registration to Pakistan, businesses in Islamabad, Rawalpindi, Lahore, Sialkot and Karachi have started selling on Amazon US, UK and the UAE. Sooner or later, almost every seller asks the same thing: why is my ad spend so high, and are my ads actually making money?
This guide answers that. It covers the two numbers you need to understand, a campaign structure that keeps things organised, and the weekly routine I use to keep Amazon PPC profitable.
Why Amazon PPC is different
On Google or Facebook, ads bring people to your website. On Amazon, the shopper is already on the store, already searching, often ready to buy within minutes. That makes Amazon ads very direct.
There is another twist. Sales from your ads help your organic ranking. When a product sells well for a keyword, Amazon tends to show it higher in the free results too. Good Amazon PPC uses ads to win sales on important keywords, then lets organic rank carry more of the load over time.
The two numbers that matter: ACoS and TACoS
ACoS stands for advertising cost of sale. It is your ad spend divided by your ad sales. If you spent $100 on ads and those ads brought $400 in sales, your ACoS is 25 percent.
TACoS stands for total advertising cost of sale. It is your ad spend divided by all your sales, including organic ones. It tells you whether ads are growing the whole business or just buying sales you would have made anyway.
A falling TACoS while total sales grow is one of the best signs you can see. It means your ads are lifting organic sales too.
Work out your break even ACoS first
Before you set a single bid, you need to know how high your ACoS can go before you start losing money on each sale. This is your break even ACoS.
Break even ACoS in four numbers
Calculation of price, fees and product cost giving a 30 percent break even ACoS, with a marker moving from 45 percent down to 22 percent.
The calculation is simple:
- Take your selling price.
- Subtract Amazon's referral fee and fulfilment fees.
- Subtract your product cost, including shipping to the warehouse.
- What is left is your profit before advertising.
- Divide that profit by the selling price.
In the example above, a $30 product with $10 in fees and $11 in costs leaves $9 profit. $9 divided by $30 is 30 percent. Any campaign running above 30 percent ACoS for long is losing money on every ad sale, unless you are deliberately investing in a launch.
Do this for every product. The answer is often lower than sellers expect, especially once storage fees and returns are included.
A simple campaign structure that works
Messy accounts are the main reason Amazon PPC gets expensive. The same keyword ends up in five campaigns, bidding against itself, and nobody can tell what is working. Here is a clean structure for each main product.
| Campaign | Targeting | Its job |
|---|---|---|
| Auto | Amazon chooses searches and products | Discover new search terms cheaply |
| Broad and phrase research | Broad and phrase match keywords | Find more converting searches |
| Exact performance | Exact match on proven keywords | Spend most of the budget on what already sells |
| Product targeting | Competitor and related product pages | Win shoppers comparing products |
| Brand defence | Your own brand name | Stop competitors taking your brand searches |
Search terms flow from the top of this table to the bottom. When a search term from your auto or broad campaigns gets a few sales at a good ACoS, you move it to the exact campaign and add it as a negative in the research campaigns. That way each keyword lives in one place with one clear bid.
If you are brand registered, add Sponsored Brands for your main category keywords and Sponsored Display for retargeting shoppers who viewed your products. My Amazon PPC service page explains how I use each ad type.
My weekly Amazon PPC routine
Amazon PPC rewards steady attention more than big changes. This is the routine I follow every week.
- Download the search term report. Look at the last 14 to 30 days.
- Harvest winners. Move search terms with sales at a healthy ACoS into exact match.
- Cut losers. Add search terms with many clicks and no sales as negatives.
- Adjust bids. Lower bids on keywords above your target ACoS and raise them slightly on strong performers.
- Check placements. See whether top of search or product pages convert better, and adjust placement bids.
- Check stock. Reduce spend on anything close to running out, since stockouts can hurt rank.
- Review TACoS. Make sure total sales are growing, not just ad sales.
Mistakes I see most often
- Auto campaigns running for months with no negatives. They keep paying for the same useless searches.
- One bid for everything. Strong keywords get starved, weak ones get overpaid.
- Advertising weak listings. Ads cannot fix poor images, few reviews or a high price. Fix the listing first.
- Chasing a low ACoS during launch. New products need some investment to build sales history and rank. Plan for a higher ACoS for a limited time, then bring it down.
- No brand defence. Competitors bidding on your brand name can take sales you have already earned.
A note for sellers based in Pakistan
Sellers working from Pakistan face a few extra challenges, including longer shipping times to Amazon warehouses, tighter margins and time zone differences with US shoppers. All of these make planning more important. Keep enough stock buffer, factor every fee into your break even ACoS, and schedule bid changes around the hours your target marketplace is most active.
If you also sell on other marketplaces, my eBay Ads and Etsy Ads services follow the same profit first approach.
Frequently asked questions
What is a good ACoS on Amazon?
It depends on your margin. Work out your break even ACoS first, then aim to stay below it for profit campaigns. During a product launch, a higher ACoS can be acceptable for a planned period.
What is the difference between ACoS and TACoS?
ACoS compares ad spend with ad sales only. TACoS compares ad spend with total sales, including organic. TACoS shows whether ads are helping the whole business grow.
Can sellers in Pakistan run Amazon ads?
Yes. Sellers registered on Amazon marketplaces can run Sponsored Products, and brand registered sellers can also use Sponsored Brands and most Sponsored Display options.
How often should I change my Amazon bids?
Weekly is a good rhythm for most accounts. Changing bids every day usually reacts to noise rather than real trends.
Should I hire an Amazon PPC expert?
If your ad spend is growing and your ACoS keeps rising, an expert review usually pays for itself quickly. Call or WhatsApp me on 0343 5853835 for a free look at your account.