3 Simple Tips to Reduce your Amazon ACoS

If you have realized that your Advertising Cost of Sale (ACoS) has gone through the roof, you might be looking for ways to decrease it. 

After all, the lower the ACoS the lower the ratio of advertisement costs to sales generated. The goal is to drive down your ACoS as low as possible without compromising your sales revenue figure.

If you are looking to lower your Amazon ACoS, you have come to the right place. Here are three suggestions that can definitely help you out.

1. Throw in some negative keywords.

Negative keywords have a positive impact on your business. With them, you can reduce your ACoS by inhibiting Amazon from having to bid on unnecessary keywords. 

Let me paint you a picture. Imagine that your company sells red pumps for women, would you want Amazon bidding on useless keywords that mention other colors except red?

Take a good look at your campaign data to weed out unnecessary keywords.

You can also check other keywords metrics to help you have a better understanding of what’s going on. Study the click-through-rate (CTR) and locate search phrases that do not do your products any favor. Some of them may seem relevant, but if they are not resulting in any sales, you should not bother. 

A keyword phrase that typically receives 15 clicks, none of which resulted in conversion, is a negative keyword. Case closed.

When listing out your keywords, here is how you record the negative keyword phrases:

Step 1: Go to your Amazon.com Seller Central account.

Step 2: Proceed to Advertising View

Step 3: Choose the Ad Campaign and Ad Group

Step 4: Click on “Negative Keywords”

Step 5: List out your keywords.

Step 6: End it by clicking “Add Keywords” and saving them.

If along the way you discover other negative keywords, don’t stress it. You can add more keywords to the list by following the same steps. Conversely, if you notice a decrease in clicks and conversions when you change up your negative keywords, you can remove the key phrases and include them in your campaign like nothing happened.

2. Take advantage of Exact Match Keywords

One other option that is staring you in the face is utilizing exact match keywords. It can assist you in your goals of reducing your Amazon ACoS.

Through this targeting option, you let Amazon bid on a specific keyword against other variations of the keyword phrase. For example, you are targeting “red women’s pumps”. Amazon wouldn’t bid on similar keywords such as “red women’s pumps size 6”. This won’t be gainful, anyway, if you don’t have that size in your inventory.

Instead, you can look up noteworthy and related keywords by scrutinizing your ad reports to see how other keywords fare. Observe and study the number of clicks, impressions, and sales that these keywords resulted in and contrast them with the other keywords. 

From there, you can identify which of the keywords can give you a satisfactory return on investment. You can also craft a campaign for them. When you relocate these keywords into another campaign, thereby removing them for their current one, you can fine-tune your overall advertising strategy by creating more targeted ads.

3. When it comes to Bid Management, be ahead of the curve.

Conducting regular inspections and actively managing your bids can aid in minimizing your ACoS. It gives you some leverage whenever you notice fluctuations. You can spring into action right away whenever you notice low sales for off-season products or an increase in sales when sale and shopping season abound.

Say you sell winter gloves on Amazon, but spring just sets in. It does not make sense to promote these gloves, so why not decrease your bids. You can anticipate how your customers behave if you pay enough attention to them. If you are sure it’s not in-season, why force it and spend money trying to earn a sale from it? You could channel your funds and put them to better use by promoting other products that are more in-demand at the moment. Or consider it additional income. It’s up to you, but don’t spend on an item that only a selected few need.

By contrast, if you are noticing a spike in sales from your advertising efforts, you can be more proactive with your bedding approach. This is a surefire way to fire up your campaign and make more impressions and hopefully, conversions. 

In both cases, having a proactive approach increases your ROI and lowers your ACoS.

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