One of the great features of using Amazon.com as your selling platform is that Amazon will do a lot of the heavy lifting to sell your product for you. Not only is it the world’s number one online retail site, but there are all kinds of secret algorithms at work to make your product pop up during searches. For example, when you shop for something yourself you’ve probably noticed that Amazon will give you recommendations based on your search. It will tell you that other people who bought this product also bought another product with it. It will show you similar products and it will even show you products from other online retail sites that are similar to your product. Not only that, Amazon will follow you to Facebook. Suddenly all the Amazon ads on Facebook are based on recommendations for you from Amazon based on your previous browsing history. It is scary how darn efficient Amazon is. All of these recommendations are based on what Amazon knows about you, the keywords you used to search, what is most popular in your search category and…advertising.
Yep. Amazon’s ads are so slick they look like Amazon itself. Because they are constantly promoting other options to you, you may not even realize that someone has paid to be one of your shopping options. So what does this mean to you as an FBA seller? It means firstly that Amazon is constantly promoting your goods to targeted buyers for free. If your product’s rank is the lowest in a particular category or search term, your item will be at the very top.
Next, if you are an FBA seller, your offer will appear before the merchant sellers when a buyer clicks through to the “all offers” pages. So even if your offer is not the lowest price, it will appear before a merchant seller in the buyer’s eyes. This is a huge advantage and you don’t even have to pay for it. Thirdly, the mysterious Buy Box. If your product is close to the lowest price plus shipping (within a few percentage points), your offer will rotate in the Buy Box with other similarly priced items. Amazon estimates that approximately 70% of buyers buy from the Buy Box so this is no small advantage.
Despite this incredible support by Amazon, sometimes a product doesn’t sell or sells so slowly that you despair of ever unloading the 200+ you bought wholesale. At this point you may ask yourself as I did, “is it time to advertise?” Let that answer be a resounding “YES!” I recently experimented with advertising on several items and the results blew my socks off. Just like everything else that Amazon makes money off of, advertising is an easy and pleasant experience on Amazon.com. It is faster and easier than Google Adwords and better in so many ways.
To get to the point, for about 50 cents to a dollar a day total, I jumped started several products which are now selling multiples for me every week. I know it is the advertising because the dog toys had been sitting gathering dust for over a year. Yep. I had to pay long-term storage fees on several hundred dog toys and I was mad at myself. I should have advertised sooner but I was busy and didn’t want to learn something new and “someday” stretched into a long time, blah, blah, blah. Don’t make my mistake! I’m so excited about advertising now that I’m looking for products to advertise so I can turn my inventory faster.
If you’ve ever used Google Adwords before, you will find Amazon to be simpler, more elegant and faster. If not, my new Step-by-Step will help you create your first ad (you will need to login to my free FBA Library to see it). For those of you who are curious about the product I’m selling, let me state for the record that I am NOT making my desired margin on these dog toys. It was a mistake all the way around to buy them. By advertising, I’m getting them out of my life and recouping my costs, but I’m not making the money I should on them. Doing better than breaking even is a victory at this point. When I first bought them, I thought I’d be able to sell them for much higher but there were so many low-ballers that bought at the same time; that they sat there for months and months selling below my cost. Once I was the last seller standing, I raised my price, but the hit from the long-term and the monthly storage fees cut into my margin a lot. Even when I was the only seller, they barely moved. That’s when Amazon’s email about advertising came into my inbox and I clicked the link…
A few things to know about Amazon ads:
- You have to be rotating in the Buy Box – it won’t work if your product is significantly higher than the other sellers
- When someone clicks through the ad, your product will be in the Buy Box every time (nice!)
- You pay per clicks not views/impressions
- Amazon keeps track of impressions for you, also
- Amazon keeps track of your key words for you so you can refine your search terms over time
- You have a maximum bid and spend per day, but Amazon will only charge you the minimum required
- Your items must be new
Q. What about items that are selling already? Are they a good target for advertising?
A. Yes! Since reading Jessica Larrew’s book on Liquidation Gold* last year I’ve been buying a lot of grocery items in bulk. Because expiration dates are an issue with food found in these stores, I’m advertising several of my food items even though they were selling a few units a week without advertising. I wanted to see if advertising increased sales or not. The short answer is YES! Absolutely. I went from about 1-2 sales a week to 4-5 sales a week on one item I was selling by the case. This tells me that even items that are selling might benefit from advertising. If I have enough margin in the item to support a few dollars a week in advertising, then I should do it. Inventory turn is the name of the game and I usually have a lot of margin in food items from liquidation stores – even with the extra weight of selling in multiples.
Q. Should I advertise with something where I don’t have a lot of units?
A. This depends on your margin. If you have a high-margin item that you want to turn faster, it may be worth setting up an ad – only you can say what your time is worth. The nice thing about Amazon ads is they can be turned on and off at will and they will turn off when you run out of product so you are not paying to promote someone else’s inventory. Depending on how long I work on my keywords, I can set up an ad in 5-10 minutes. Advertising is only for new items, however, so all those long-tail used books and collectible games you have? Sorry Charlie.
Q. How quickly will my items sell?
A. This is hard to say. It is still based on popularity and what people want when they come to Amazon.com. If your item is very niche-oriented, there just may not be that many buyers. I’m selling food and dog toys right now which have a broad consumer appeal. What I have noticed is that as my ads work and my items sell, my sales accelerate. This is because Amazon’s other algorithms come into play to push the item further up in searches for free. So while my impressions and click-thrus may stay about the same from week to week, I see sales from non-advertising efforts increase also.
Q. How much does it cost?
A. I set all my ads at a maximum of $5 a day. That means that if Amazon reaches $5 for a particular ad in a day, it will turn it off. What I have discovered is that I’m actually spending around 50 cents a day for my particular items and search terms…combined. This is the case for several reasons. While I have set bids at around 10-30 cents per ad, that is also the maximum. Most of my ads are actually getting placed for one-to-three cents per ad which means I’m paying very little for each click-thru.
Q. How does bidding work?
A. Bidding is your maximum, but Amazon will only charge you the minimum required to place the ad. If you look at each ad exposure as potentially being competitive, it makes more sense. Your search term is “Walden Farm,” for example and you’d like your product to appear at the bottom of a page where a customer has pulled up a Walden Farms item. They are buying salad dressing and you’d like them to know they could also buy Walden Farms ketchup, for example. There are only so many slots down there (6) and you want one of them. You are now competing with an unknown number of other advertisers who are selling Walden Farms products. You are willing to pay up to (15 cents in my case) for that spot. You only have to pay when they click-thru. If you are the only bidder or the other folks have bid less for that space, then you win it at the lowest possible price. In my advertising so far, I’ve never paid full price for an ad which is why my daily spend is usually 50 cents to $1 total for five products. This is partially because I also use very targeted search terms.
Q. What are good search terms? How do I find them?
A. Amazon will make a few suggestions for you, but they are pretty obvious. You can use free search term tools from Google (savor the irony here) or you can simply guess and refine. In either case, you will be checking in with your ads regularly to see what terms are working best for you and eliminating the ones that don’t. The more popular the search term (“dog toys” for example) the more you will pay if there is a click-thru. On the other hand, there will probably be fewer click-thrus with such a broad term. In my case, I’m focusing on niche search terms because they are more likely to turn into sales for me.
There are a lot of dog toys on Amazon, but fewer “dog toy ball,” “dog toy tennis ball,” “dog toy rubber ball,” you get the idea. I pay less for those search terms (they are not as competitive) and they are more targeted to what I am selling. In setting up your search terms, be sure to use the brand name, item attributes and categories. If yours is a certain color try terms with and without the color to see which produce better for you. Brainstorm a lot of possible search terms in the beginning. Pretend you are the buyer – how might you look for a product? How might you browse and stumble on an item?
I have a food product that falls into several categories – spices, chickpea, Indian, Asian, garbanzo beans (the package says “chickpea” but people often use “garbanzo bean.”), etc. Be sure to make your terms short and long. In the previous example, I use “garbanzo bean” but I also use “garbanzo” for each term. I spell “chickpea”, “chick pea”, “chickpee” and “chick pee” because some people are bad spellers. Don’t use plurals. Use “spice,” “bean,” etc. The reason for this is you will get the plurals automatically but if you use plurals you will NOT get the single automatically. Be sure to include the brand name.
Q. Is it easy to do?
A. Incredibly easy. I tried to do Google Adwords for my book and it was a lot more difficult to set up. I needed help from Google just to get set up. I gave it up, ultimately, because Google would not allow me to promote my book (they didn’t like the title). You will never run into that problem on Amazon! They like selling stuff.
Q. Are there things you can’t sell with an Amazon ad?
A. I still can’t sell my book, ironically. At least, not through Seller Central. You can only sell your own inventory through SellerCentral. I’m trying to figure out what Amazon offers publishers so I can promote my book and video on Amazon. Sigh.
Q. I have several items that are merchant-fulfilled. Can I use an Amazon ad?
A. Yes. You have to be in the Buy Box.
Q. I have an online store outside of Amazon.com. Can I promote my products on Amazon?
A. Yes. If you’ve ever scrolled down to the bottom of a listing, you’ve likely seen “Product Ads from External Websites.” These are ads from outside sellers. Learn more HERE. When I looked earlier this week, they were offering $75 in free clicks when you sign up for Amazon Product Ads. I don’t know any more about it than that so please read everything carefully in case bidding, etc., works differently.
If you’ve got a few slow sellers in your inventory mix that you’d like to get out the door, consider advertising. I was pleasantly surprised at how inexpensive and easy-to-use it was. I suggest you start small and experiment to see how it works for you. Don’t bid more than you can afford to spend. Your results may vary from mine. Once again, here’s the link to the page on my FBA Library that has my free Advertising Step-by-Step with screenshots and directions. You will need to login or set up your free account to see it.
Have you tried advertising on Amazon.com? Please share your results in the comments below!
*I make a small commission if you click through this link. You are welcome to go directly to Jessica Larrew’s site at www.jessicalarrew.com if you are adverse to affiliate links. If you are curious about my personal experience reading and using her book, read my previous blog post titled Find Sales Gold on Amazon.com with Liquidation Stores from last August.