Decide Amazon Ads Budget Based on Sales Goals
The last method for determining how to select an Amazon Ads budget is to consider what your sales goals are, and adjust your Amazon Ads budget in order to meet that sales goal. The first step for this method is to decide a sales goal for a selected period of time, for example, let’s say your monthly sales goal is $100,000. One way to do this is to allow your campaigns to run and analyze the performance based on ACoS. If your ACoS is 20% (Every $20 you put towards advertising returns $100), then to generate $100,000 you may need to spend $20,000 to achieve that sales goal. This specific calculation does not consider the organic sales that occur without advertising but it does give you a ballpark figure to the potential amount you may need to spend to reach that sales goal.
Conclusion
In order to find success and reach your goals for selling on Amazon, it is important that brands and manufacturers implement a strategy for how to decide what your Amazon Ads budget should be. In this post we have covered several methods for approaching this topic including starting with a small budget and progressively increasing the ad budget, calculating a budget based on a prior time period’s sales, and determining an ad budget to achieve your desired sales goal. Each of these methods could be used as a guide for establishing an Amazon Ads budget strategy. Regardless of which budget strategy you use, it is important to continue to optimize and improve upon your campaign and keyword performance. Pausing keywords and campaigns or adding negative search terms that are ineffective will free up advertising spend towards the campaigns, keywords, and search terms that provide the best return. If you need help with establishing an Amazon Ads budget strategy, or any other questions related to Amazon Ads, please reach out to Goat Consulting using the contact us form below.
