Before we go into details, we first need to know what ACoS on Amazon really is?
ACoS (Advertising Cost of Sale) calculates the efficiency of your ad campaigns and it is the ratio of ad spend to the revenue.
IMPORTANCE OF ACOS
ACoS is really important for your businesses because with this, you can calculate how much you can spend on ads and how much profit you will get in return.
In the beginning, usually ACoS is high but don’t get stressed because when your brand gradually gets flourished and a proper strategy for ad campaigns is made, ACoS gets lowered.
In this article, we will discuss few easy tips to reduce ACoS on Amazon.
TARGET THE RIGHT AUDIENCE
No matter whether you are an Amazon individual seller or Amazon professional seller who is selling thousands of products, spending lots of money on ads that are targeting wrong audience is still a headache. You are spending thousands of dollars on an ad and it is targeting the audience who is looking out for something else and is not interested in your ad is actually a waste of money. For this, a proper strategy of ad campaigns should be made through which the ads should run.
The strategy should cover the following:
• Spending less money on ads.
• Targeting relevant audience.
• Selling more and spending less on ads.
Hence, this strategy is a key to reduce ACoS on Amazon.
MAXIMISE REVIEWS
According to a research, it is a human nature that whenever someone buys stuff from an e-commerce website, he first checks out the reviews on the product. If the reviews are good, he definitely considers it. Suppose ten different brands have listed an anti hair fall shampoo, people will order the one with maximum good reviews. It is not about shampoo, it is about human psyche. No matter how much you are spending your ads and getting millions of clicks, if your product does not have good reviews, everything will be of no use. To reduce ACoS and making tons of bucks, just focus on getting maximum good reviews on your products so it can get sold out more.
ADVERTISE THE HOT-SELLING PRODUCTS
This tip is exclusive for professional sellers who have tons of product categories and spending lots of money on advertising them. It is really stressful when you are spending a lot on advertising several products but not getting sales on any of them. For this, a complete plan should be made where sellers should figure out which one of their products is highly demanded and only that one should be advertised instead of advertising all of them. This is really helpful for reducing Amazon ACoS. You can find top 1000 best selling product on amazon here
REMOVE THE NEGATIVE KEYWORDS
Once you completely understand the format of keyword performance, you will be able to differentiate between those keywords that have badly affected your profitability and those that are beneficial for your sales and profits. Many sellers don’t actually know how badly those ‘irrelevant keywords’ can affect your businesses, they can stop your sales and completely spoil your profits. Just make a list of such keywords and follow the rule “Keep those that make money and remove those that hinder your profitability.” you can learn more about amazon keyword research here
STALK YOUR COMPETITORS
If you want more sales and optimised ACoS, first check out your competitors and leading brands to see what keywords they are biding on. Do not copy their keywords, just learn their strategy to flourish your business and reduce ACoS in less time.
MAKE A BUDGET
In the beginning of developing your brand, you need to spend money on advertising your products without any profit. Many sellers spend thousands of dollars without any proper plan and strategy. You need to make a proper budget of spending on your ads – do not just drown your money without knowing any direction. Always follow the rule “SPEND LESS AND EARN MORE”. Make a proper budget through which you can get more and more sales by spending less money on ads.
PERFECT CONTENT FOR PAGE
Before you spend tons of money on advertising, spend it strategically.
Would you ever order a product from an e-commerce platform where only product description is mentioned and no image is available?
Understand the mindsets of people, they like to pick something which is eye catching.
You spend a lot on ads but get no sales because product is not displayed perfectly. Is it justified?
To reduce ACoS, the best tip is to properly display your products – upload high quality professional photos that seek everyone’s attention. This is how you can get more sales and there will be no need to waste a lot of your money on ads.
CORRECT BID AMOUNT
The biggest setback for your businesses is to set wrong bid amount – either too low or too high. To make lots of money and reduce ACoS, you need to set the correct bid amount for the ads.
How to get right bid amount?
Here is the formula of finding the correct bid amount:
First take the average value and then multiply it with the conversion rate. After this, divide the number you will get by 1 divided by Target ACoS.
KEEP CHECKING YOUR STORE
Most of the sellers on Amazon make the same mistake, they don’t stop running ads on Amazon even when their products get out of stock. It actually wastes their money and ruins their credibility in front of customers. To reduce ACoS, keep looking at your store, whenever a product gets out of stock, just stop running the ads. This is really helpful for reducing ACoS on Amazon.
CONCLUSION
Specially in 2021, when the whole world is locked down, people are preferring to buy their goods from e-commerce websites rather than malls and shops. Due to this, Amazon businesses are flourishing but spending on advertisements without making any budget is wrong. To reduce your ACoS on Amazon, few easy tips have been shared above.
