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What Are Good Average ACOs On Amazon & How Can We Improve It?

Table of Contents

Running a successful Amazon business requires a deep understanding of various metrics, and one of the most crucial among them is ACOS (Advertising Cost of Sales). Improving your average ACOS is critical to maximizing Amazon’s profitability. This blog will discuss strategies to optimize your average ACOS on Amazon and explain why partnering with a professional service can make a significant difference.

What Are Good Average ACOs On Amazon and How Can We Improve It?

Understanding ACOS

The simple formula of ACOS is calculated by dividing your total ad spend by your total sales attributed to ads and multiplying by 100. It is expressed as a percentage: A lower ACOS indicates a more cost-effective ad campaign, meaning you spend less on advertising to generate sales.

Strategies to Improve Your ACOS

Optimize Your Keywords

  1. You should conduct keyword research to identify high-performing and relevant keywords.
  2. Use negative keywords to eliminate irrelevant clicks that don’t convert.
  3. It is good to refine your keyword list based on performance data regularly.

Enhance Product Listings

  1. Ensure your product titles, descriptions, and bullet points are clear, concise, and keyword-rich.
  2. Use high-quality images for your content. You can also go with videos to enhance the appeal of your listings.
  3. Highlight unique selling points and ACOS advertising to make your product stand out.

Adjust Bidding Strategies

  1. Implement dynamic bidding to adjust real-time bids based on the conversion likelihood.
  2. Use bid adjustments to increase visibility for top-performing keywords and decrease bids for low-performing ones.
  3. Consider using manual bidding for better control over your ad spend.

Utilize Amazon Advertising Options

  1. Utilize Sponsored Products, Sponsored Brands, and Sponsored Display ads to reach different customer segments.
  2. Take advantage of Amazon’s automated campaigns to discover new keywords and optimize existing ones.

Analyze and Optimize Campaigns

  1. Regularly review your advertising reports to identify trends and areas for improvement.
  2. Use A/B testing to determine the most effective ad copy.

Advanced Tactics for ACOS Optimization

Let’s delve deeper into calculate ACOS optimization and explore advanced tactics to enhance your advertising efficiency.

Utilize Amazon Attribution

Understanding how external traffic sources contribute to your Amazon sales can help you allocate your budget more effectively. Moreover, it can help you optimize your overall marketing strategy. This holistic view helps reduce your ACOS by ensuring your ad spend is directed towards the most profitable channels.

Refine Targeting with Audience Insights

Audience targeting on Amazon allows you to reach potential customers based on their shopping behavior, interests, and demographics. By utilizing these insights, you can create highly targeted campaigns that resonate with specific segments of your audience.

Seasonal Trends

Seasonal trends can significantly impact consumer behavior. By analyzing past performance data and understanding seasonal patterns, you can adjust your ad strategies to capitalize on peak shopping periods. This proactive approach ensures you maximize your ad spend when customers are most likely to convert.

Implement Advanced Reporting Tools

Investing in advanced reporting and analytics tools can provide deeper insights into your ad performance. Tools such as Helium 10, Jungle Scout, and Sellics offer comprehensive analytics, helping you to track and measure key metrics. Also, this helps to identify trends and make informed decisions to improve your ACOS.

Optimize Product Pricing

Competitive pricing plays a crucial role in conversion rates. Regularly review your product pricing strategy to ensure it aligns with market conditions and competitor pricing. Dynamic pricing strategies can help maintain a competitive edge. Moreover, it helps to improve the cost-effectiveness of your ad campaigns.

Professional agency Advantage

By partnering with professionals, you can leverage these advanced tactics with the guidance of industry experts. Here’s how they can further enhance your ACOS formula efforts:

Comprehensive Market Analysis:

These agencies conduct in-depth market research to understand your niche, competition, and target audience. This thorough analysis informs strategic decisions that align with your business goals.

Continuous Improvement:

Their commitment to constant improvement means they always test new strategies, analyze results, and refine campaigns to ensure optimal performance. This iterative approach ensures sustained success in your Amazon advertising efforts.

Dedicated Account Management:

With dedicated account managers, it provides hands-on support and proactive management of your Amazon campaigns. Their team is always available to address any concerns and make necessary adjustments to keep your campaigns on track.

Product Launch Strategies

Launching new products on Amazon requires a strategic approach to gain visibility and traction quickly. The Acos advertising offer:

Optimized Listings:

Crafting compelling product listings with optimized keywords, high-quality images, and persuasive copy to attract and convert customers.

Promotional Campaigns:

Implementing targeted promotional campaigns, including lightning deals, coupons, and giveaways to boost initial sales and reviews.

Brand Management

It helps maintain a strong brand presence on Amazon, essential for long-term success. These assist you in:

  1. Brand Registry: Helping you enroll in Amazon Brand Registry.
  2. A+ Content: Creating rich A+ Content (formerly Enhanced Brand Content) to showcase your products with detailed descriptions, high-quality images, and engaging multimedia.
  3. Storefront Design: Designing and optimizing your Amazon storefront to provide a seamless shopping experience and reinforce your brand identity.

Customer Engagement

Engaging with your customers effectively can increase retention rates and positive reviews, improving your sales and ACOS. These services include:

Customer Feedback:

Implementing strategies to gather and respond to customer feedback. Thus, it helps you improve product quality and customer satisfaction.

Review Management:

Monitoring and managing product reviews to address issues and encourage positive feedback promptly.

Conclusion:

Improving your average ACOS on Amazon is critical to maximizing profitability. These professional services allow you to access expertise, advanced tools, and personalized strategies tailored to your business needs.

FAQs

What is the average ACOS to spend on Amazon?

Amazon’s average Advertising Cost of Sales (ACoS) typically ranges between 15% and 20%. However, this can vary widely depending on the product category, competition, and campaign goals.

What is a good ACOS score?

A good ACoS score generally falls below 30%, indicating that the advertising costs efficiently contribute to sales. However, the ideal ACoS varies based on profit margins and business objectives.

What is considered a high ACOS?

A high ACoS is typically above 50%, suggesting that advertising costs are consuming a large portion of the sales revenue. This may not be sustainable in the long term unless there are strategic reasons for maintaining high visibility.

What is the average RoAS on Amazon?

The average Return on Advertising Spend (RoAS) on Amazon is about 3-4x, meaning the seller earns three to four dollars in sales for every dollar spent on advertising. This can vary significantly by product category and campaign effectiveness.

What is ACOS in Amazon?

ACoS, or Advertising Cost of Sales, is a metric used on Amazon to measure the effectiveness of an advertising campaign. It is calculated by dividing ad spend by sales generated from ads, indicating the percentage of revenue spent on advertising.

What does ACOS stand for?

ACoS stands for Advertising Cost of Sales, a key metric for evaluating the efficiency and profitability of an Amazon advertising campaign.

How do I work out my Amazon ACOS?

To calculate your Amazon ACoS, divide your ad spend by the total sales generated from those ads, then multiply by 100 to get a percentage. For example, if you spent $100 on ads and generated $500 in sales, your ACoS would be 20%.

 

Picture of Zeeshan Riaz <br> <span class="designation">Chief Operating Officer</span>
Zeeshan Riaz
Chief Operating Officer

With education and experience in IT. Law and E-commerce industry, I have successfully helped more than 250 E-commerce businesses worldwide to reduce their operational cost with cutting edge eCommerce Marketing Services. I do manage a team of more than 250 people team which includes Amazon, eBay, Shopify, website development, SEO and SMM experts.

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