Launch Strategy – Gain Initial Sales Momentum & Visibility
ACOS =< 100%
This strategy is usually used when the product has just been launched.
Initially, with very low or no visibility, it is almost impossible to reach out to your potential customers. Amazon solves this problem by providing an opportunity to gain visibility through Sponsored Ads. The more sales you get, the more organic visibility you get. This is called product launch through sponsored ads.
The more aggressively you bid, the more sales you get if your product, product listing, and other factors are ideal. Typically, the ACOS during launch tends to go as high as 100% or in other words breakeven ACOS. But remember, anything more than a 100% is you spending more from your own pocket
Ranking optimization/ organic sale growth – Increase organic search visibility
ACOS <= Target ACOS
Setup up manual campaigns focusing only on selected few high search volume keywords that you want to rank for.
Let’s take an example – If a buyer types in “glass water bottle” and find your sponsored ad and buys your product, you get 1 impression, 1 click and 1 order. More the number of people buy your product the same way, the more your ranking will increase for the keyword “glass water bottle”.
You apply the same strategy and rank higher and higher until you reach page 1 for keywords like “glass water bottle”. Typically if you start generating more sales than the top sellers on the page for this specific keyword, then you can rank on page 1. This process can be steadily repeated over and over again until you rank on page 1 for at least 10 keywords.
Set a target ACOS (just a part of your profit) depending on how much you are willing to spend on this specific campaign.
Keep in mind that you need to get sales more than the top sellers on page 1, consistently for about a week to start ranking on Page 1. You can refer to SellerApp Chrome Extension to find out average daily sales and daily estimate sales of top sellers for a specific keyword. Hence select keywords that have a good balance between high search volume and low or medium daily sales (competition).
Scale fast strategy – Increase sales volume by bidding aggressively
ACOS < Target ACOS
This strategy allows you to bid aggressively to gain high sales momentum in a short period of time. The trick is to get a high number of impressions quickly and try to maintain a healthy overall ACOS.
This means bidding on unproven keywords in the hope of getting sales from every source possible, which could lead to wasteful spend and possibly high ACOS. It will be hard to maintain campaigns with a lot of keywords but if the listing is well optimized and the product has proven to be a success in the past, this strategy has a high chance of working wonders.