How to calculate the optimal bid per click

How to calculate the optimal bid per click of a keyword to reduce the ACoS.

The bid per click is how much we are willing to spend for a click on the product page.

Amazon Seller Central provides the suggested bid calculated using data from all auctions of all the sellers. The problem is that it does not take into account the sale price, the conversion rate and the profitability of the product.

If our competitors have more performing product pages (e.g. reviews, photos, product features, price) then the conversion rate will also be higher and consequently they can afford to spend more for a click.

At the same time, if our sales price is higher than competitors, despite the fact that the product has a worse conversion rate, it can afford to offer more for a click.

The optimal value for the offer per click is:

Bid = Average Selling Price x Conversion Rate x Target ACoS

  • An average sales price to take into account if you sponsor more variants in the same campaign
  • The conversion rate of a keyword is calculated as Orders / Clicks. To calculate it we take the data of the last 30-90 days
  • The target ACoS% is the level of AcoS we want to achieve in the long run
Amazon has several bidding strategies: Dynamic Down only, Up & Down, Fixed. If you set the bid to the optimal level according to this formula, you can choose the "Dynamic Up & Down" strategy which is the best performing if the campaign has been running for some time. This is because the amazon algorithms have collected more data and are able to correct the bid to increase sales.

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