I have 10-20 orders per day but all the profits are eaten up by ads! Should I continue to work hard on ads? How can I quickly reduce the proportion of ads?

Saury hfub

My C position

Category: Outdoor category
Customer order: $6-10, the competition in the market is basically in this price range
Launched in December 2023, 10-20 orders per day

Profit: About 40% excluding advertising gross profit
Market: The functions and shapes are basically the same, the price difference is not big, there will be more competing outfits of the same price, and there will be different materials
 
The first batch was shipped as a test model, and the inventory was relatively small. The main SKU was out of stock for half a month in January.
During this period, the advertising focus shifted to another color SKU, and then switched back after the product arrived.

Guangfan Advertising-Long tail keywords, ABA ranking around 10,000-100,000

Accurate, ABA ranking within 10,000

Automatic ads

Ads in the past 30 days

About 80 per day of advertising expenses
The proportion of advertisements is particularly high and there is no better way to reduce it.
 
Currently only SP ads are available

Currently, most of the profits are eaten up by advertising. I would like to ask you how to reduce the proportion of advertising more quickly for products with low customer orders like this?

"Wonderful Reply"

Achi9697 - Post-95s Xiaobai

Agree with: Autumn Water and Sky, Autumn Saury hfub, Ordinary Life, Lilizhizhi, ROSEMMA more »

For example, I have worked on lamps and clothing. The price of lamps was 69-109, the CPC was 10 dollars per click, and the brand advertisement was 25 dollars per click. Our gross profit was only 20%. Right, it is difficult to do it by looking at the data, but we can actually do it because the repurchase rate of industrial and commercial lamps is very high. It is impossible for every warehouse, barn, gymnasium, etc. to only need one lamp at a time.

So even though we have a high conversion rate, maybe acos100+ in the first week, but our product is good, customers buy only samples after the first purchase, and the data is very good when they repurchase in the second week. This extension is sustainable development;

Let me give you another example. I sold clothing before, which was even more outrageous. My price for a single item was $15.99, and the gross profit margin was 30%. CPC was $1 per click, and the conversion rate was 1.6%. How could I burn money and lose money? After 2 months of promotion and optimization, the conversion rate reached 4%. However, in this way, 4 orders were made out of 100 clicks, and $64 was sold out of $100. The number of orders increased, but the profit was still negative. So we found other breakthroughs. We put more products on the shelves, formed a supporting sales plan, and mainly used brand advertising. In this way, customers not only made multiple purchases, but also the average order value of a single conversion could be increased, and the conversion rate was increased to 10%+, thus turning to profitability.

The purpose of these two examples is to express that different markets have different ways of promoting products. You can't just stick to advertising, as this won't yield any analysis. Ready-made data is ready-made, and you have to analyze your profit point based on the market. If you do this, so do others. If others can make money, then you can too. If you can't find it, then stop loss in time.

Life in Troubled Times - Xiaobai

Agree from: iKun25years, 7k7ktiaotiao, sauryhfub, leovsam, Thomas小白 More »

Summary: For this product, let me first talk about your promotion. There are big problems in the whole promotion process. The probability of making money by promoting it with low customer unit price is too low. The cost of PPC will make you spend more than you earn or work in vain. It seems that there are orders, but the profit is terrible when you calculate it. You should try other promotion ideas, such as off-site, big discounts on the site, and low prices. You must get rid of the dependence on advertising.

The details are as follows:
1. Regarding advertising, what someone said above is very correct. Advertising needs to be streamlined. Too scattered and too mixed, resulting in many keywords not being listed. I guess your advertising orders account for a high proportion, estimated to be more than 50%. It needs to be optimized and streamlined, choose the best performing keywords, and try to be as precise as possible, considering two dimensions, first, CVR, second, ACOS.

2. Optimize product listings. This is a commonplace. Price is also part of the optimization. The key is to measure the CVR of the top products in your product category. Your listing must exceed their CVR and must exceed 30%. For example, if others are 15%, then you must achieve 20%. No matter how you optimize, you want this value. To put it bluntly, it is to make Amazon think that your product is better than others, so as to stimulate traffic and achieve order growth.

3. The above two complement each other. As CVR increases, ACOS will also decrease.

4. You must control the daily cost of the product. Don’t blindly increase the budget. Spend as much as you increase. Even if you increase, it should be increased within a short period of time and have your own reasons. The advertisement must run all day, and lower the bid when the budget is used up. Adjust it according to the actual situation.

5. Consider the performance goals of the product and do it in stages. When will the number of orders be reached, when will it start to make a profit, and how much profit will be made. Some products cannot achieve the pie that a boss wants no matter how hard you try. Recognize the reality, the market, your own products, and your own (company's) strength.

6. Try outside the site, abandon some advertisements or abandon advertisements as much as possible, change your thinking, and use the money lost from advertisements to place orders outside the site. If there is a loss, just grasp the overall situation.

Positive and optimistic - A three-year Amazon operator who loves advertising

Agree from: 小CHEN 、 Thomas小白 、 lxacsy 、 Do you eat oranges 、 yingar2786 More »

My humble opinion
1. Too much advertising traffic is a bad thing for the product. From your extensive, precise and automatic
 
Manual Broad - Conversion rate is too low. Generally speaking, the purchase decision time for products with low average order value will be very short, and the conversion rate should be relatively high. However, judging from your advertising data, there are too many words in the broad advertising, resulting in a small amount of budget for each word. Note that I said "grab". Each word in the same broad advertising will grab the budget. I don't know if you have noticed when the budget of the advertising campaign is over. It is recommended to streamline the broad advertising and improve the quality of this broad advertising first. If you find it difficult, you can consider starting a new broad advertising campaign with 3-5 words in one advertising campaign to ensure that the words you put in can get normal exposure.
 
Automatically. From the information provided by the poster, this product should have been launched in January, and then it was out of stock and is now being re-launched. The dynamics given automatically only decrease, which is relatively weak for the product to obtain traffic. It is recommended to start with a low bid and set a fixed bid. Increase the cpc according to the traffic situation. Observe which matching method can obtain better data for the product, and then adjust the delivery.
 
Accurate. From the screenshots provided by the questioner, there are many keywords in one advertising campaign, and the CPC of each keyword is not low. You know, Amazon's nature is that if you bid, I will basically pay you. In this way of delivery, it is not a matter of advertising share. How to improve the profit?
 
Recommended Practice:
1. Streamline the advertising structure: consider what the purpose is at this stage
2. Traffic impact after out-of-stock
3. Test out the right CPC. The current CPC is too high. Your location is not suitable for placing orders under this CPC. This is reflected in the conversion rate.