Whether you sell 10 products or 10,000, chances are that one or a few of your products vastly outperform the rest of your product line. When this is the case it is important that you spend the majority of your ad spend and time on the biggest drivers of revenue.
While you need to allocate ad dollars and time to testing new or underperforming products, it is more important to make sure you are promoting your top sellers and protecting your turf. When selling on Amazon, it is always more expensive to climb to the top of the mountain than to defend and retain that position. The top spot comes with lower cost per click and advertising cost of sale (ACoS) than a newer seller due to its higher sales velocity, number of reviews, history, etc.
I constantly hear from my clients that they want me to boost sales on underperforming products because they believe that with a little tender loving care, that product can sell at the same rate as their best sellers. Sometimes this is true, but most often it is not. Not all products are created equal – and neither is their ability to sell.
When managing Amazon Ads, identify which products sell the most and focus at least 80% of your time and ad spend on those products. In fact, we actually break out many of the bestselling products into their own campaigns in Amazon’s campaign manager to make sure they are getting as much budget and attention as possible.
Moving the needle a little bit for your best sellers could mean huge profits, depending on how much you are selling. Conversely, moving the needle a little for an underperformer doesn’t produce enough profit to make it worth the effort.
For example, moving the ACoS down 5% on a keyword that has spent $1,000 over the past 30 days results in much more efficiency than moving the ACoS down 50% on a keyword that has spent $25 over the past 30 days.
In every account, some products or campaigns spend or sell more than the rest. When managing Amazon Ads, I always sort by both spend and ad revenue, and work my way down the column from high to low. This allows me to make sure I am spending the majority of my time managing the pieces of business that impact the bottom line the most.
In addition, Amazon’s customer and algorithmic behavior both reward best sellers with the kind of performance that creates even more success.
As a consumer, you are more likely to buy a product that has more positive reviews than products that may have a few to none. The more money spent promoting a product that already has a lot of sales history and reviews, the more visibility it will have, which creates a cycle of increasing sales, reviews, page views, etc.
The same is true for a product that ranks higher on the search results page algorithmically, especially if it is above the fold. The more sales, reviews, page views, etc. that a product has, the higher your listing will show organically on Amazon’s search results page. The higher your organic listings show on Amazon, the higher your overall revenue and profitability will be.
The visibility your ads generate helps improve the metrics that Amazon uses to rank products organically, which again creates a cycle of increasing performance. This is how you defend your top spot, once it is earned, in both the paid and organic placements on the search result page.
I get it: As a business owner, you want to sell all of your products, even the slow movers. But it makes better financial sense to play Amazon’s game and watch your Sales Rank and profits climb.