This Episode, #28, has been in demand by Facebook members for a while. It's a Pure Tactics, Nitty-Gritty on How to Set up Amazon Ads.

SHOW NOTES FOR EPISODE #28 -  Amazon Ads: Making sense of the Numbers

* Monitor at least weekly

* AIMS: Remember why we are doing this:

* End result of business: PROFIT!

* KEYWORDS -

* Which 20% are most profitable?

* ACTION: Increase bids and/or Peel and Stick into new Campaign

* ACTION: Also optimise your listing for these keywords if needed

* Which 20% are losing money? -

* ACTION: Pause or reduce Bid

* Analyse the Following Amazon stats:

* ACoS

* by product

* by campaign

* by keyword

* Absolute spend & sales ($ or £) per week or per month

* by campaign

* by product

* by keyword

* Product- based by week

* compare your sales for last week with ad spend for last week.

* What is your overall ACoS by product?

* What is overall ad spend

* Then look at the “True” profits: At least monthly (preferably weekly) compare Amazon Sales data and Amazon Ads.

* take a matching time period for Amazon Ads and Sales -

* I suggest “Last week” in Amazon Ads and put in appropriate matching dates for  Sales data

* Work out your gross profit per unit sold

* Add up all your COGS (cost of goods sold) for a particular week or month

* TLC=Total Landed Costs=Manufacturing+Freight+Customs costs

* Other pre-Amazon costs- warehousing/inspection/testing plus inbound shipping

* Amazon costs: Sales commission (15%) plus fulfillment costs (pick and pick and weight handling)

* Add up all your Amazon Ad costs for a product

* Calculate your “breakeven ACoS”.

EXAMPLE:  (these are actual figures from a week in December for one of my products)

Product A Sales price $19.95 income per sale

COGS:

TLC=$8 (including warehousing and Amazon inbound shipping)

Amazon costs=$5.53

TOTAL COGS: $13.53

Gross profit=$6.42

So you have up to $6.42 to spend on Ads IN TOTAL average per unit, to break even

Total ad spend last week $75.50

Unit sales last week 98 units

average ad spend per sale  $0.77

So Profit after Advertising per unit = $19.95 income - $13.53 COGS - $0.77 Ads

= $5.65=28 % Gross profit

And ON AVERAGE ACoS for this product across all ad campaigns= $0.77/$15=5%!

Glossary of Technical Terms: 

If you're wanting the detail, however, here it is:

URL: Simply a web address, e.g., www.amazingfba.com/27

ASIN: Amazon Unique Identifying Number (not sure what S stands for!) -  within the Amazon universe, this a  unique code for a product line. It is like a UPC (Universal Product Code), ie the barcode you will see on any product packaging at your supermarket, only just within the Amazon universe.

Keyword - one, two, 3 or several words entered as a search term, on Google or in the Amazon search bar. e.g. "white" "white board" "White board marker" "White board marker kids"

Keyword Match Type: Amazon will match up a search term that a customer puts in the Search bar with the keywords in your amazon ad campaign. Whether it chooses to display your ad or not depends on how precise a match you set up between a. the search term (from the customer) and b.