How to set up an Amazon advertising budget? What are the tips?

On Amazon, everyone can promote and place advertisements. To place advertisements, you need to set relevant budgets and control the cost of promotion. How to set the Amazon advertising budget?

How to set up an Amazon advertising budget ?

1. Determine your ACoS

When setting your budget, it’s important to look at your average cost of sale (ACoS). This is the amount you spend to acquire a lead. It’s important to understand your ACoS so you know how your budget will be spent.

You have to consider fees, production costs, and overhead. These all factor into how much you can spend on your campaign.

Let's say you sell a product for $100. Add in sales tax, fees, product cost, and overhead, and your costs might be around $70, or 70% of the profit on the product. That means there's still 30% (or $30) left to make a profit.

This means that ACoS needs to be below 30% for a business to be profitable.

When you determine your ACoS, you’ll have a better idea of ​​how much you need to spend to make a profit.

2. Determine the duration of your campaign

When you’re trying to determine your budget, think about how long you want your ad to run. Whether it’s a few days or a few weeks, take this into account. It will affect your budget.

If you want to run a two-week campaign, you must set a budget that allows your ads to run for that duration. And make sure there are enough funds in your budget to run your ads for the time you want them to run.

This is where an average daily amount can help you organize your budget. You can set a specific amount to spend each day to stretch your budget and attract more potential customers.

3. Set a default bid amount

When setting your budget, you need to look at your default bid amount. This is the amount you pay each time someone clicks your ad, also known as your cost-per-click (CPC). CPC plays an important role in determining your budget.

If you have a higher CPC, you won't get the same number of clicks as you budgeted. This causes some businesses to increase their budget so they can get as many leads as they want.

When CPC is lower, there is more room in the budget to attract potential customers. It can increase profitability and reduce ACoS.

4. Evaluate Return on Investment (ROI)

While you won't know your exact return on investment (ROI) until you run your campaign, you can estimate what you hope to achieve. When setting your budget, think about what you hope to get in return from your campaign.

This is the end of my introduction to how to set up the Amazon advertising budget. It’s the same on the Amazon platform. You need to find ways to promote your store so that it can be more prominent and seen by more friends.

Recommended reading:

What are the several ways to place Amazon ads?

What preparations should be made before launching Amazon ads? How to do it?

How much advertising money does Amazon have to spend in the early stage? How much does advertising cost?