Amazon PPC Strategy: Scaling Sales Without Burning Cash

Hi, today I will be talking about advertising strategy during a product launch for example or any other situation where you're pushing with ads at the break even level basically not winning any money not losing any money but you on the other hand you're actually earning money only through organic part. So stay with me. So, one of the pros of this strategy is that you're actually not losing any money. But this comes with an important fact. You have to calculate your break even precisely. You have to factor everything in such as fees, referral fees, you know, every little fee like long-term storage fee, any other fees like this new fuel fee or whatever, refunds, everything. You have to do your numbers correctly in order to prevent losing excessive amounts of money which you'll be end up realizing when you see your invoices. But if you do your math correctly, this is very effective strategy because over time what's happening is that you're pushing with the ads aggressively. You're bringing this sales velocity up. Of course, I'm not mentioning but it goes without saying that your listing has to be topnotch. Your offer has to have a sense. It's not like me too product. It's not a copycat. It's actually good quality product. And then you're building the sales velocity on the organic part. Organic part is catching up because you're winning ranks. You're winning organic ranks because you optimize your listing. Your conversion rate is pretty good. You're bidding aggressively probably more than majority of other comp competitors. And that's bringing your organic ranks up. with the sales velocity, you're also giving a signal to Amazon algorithm that your product is selling quite well. Therefore, they're pushing you even higher to the top. Once you get to the to these sweet positions that everybody loves, then you can scale your ads a little bit down because organics will are going to already be at at a good position, good levels. And then when you scale back, you're starting to gain some profit even with the with the ads. Now, what's important to mention, it's not like you can just put any campaign out there, don't watch what's happening. Just avoid going into deep optimization because if your campaign has multiple keywords as they should, except the single keyword campaigns, you have to still go inside and check what are the keyword level metrics. You don't want to be breaking even on a campaign level, but then you have one super profitable keyword inside and one which is bleeding money. So you want to have that really straighten out really good campaign structure which will enable you to control your profit margin and breaking even a cost. Well, now I also want to cover some of the cons of this strategy as everything it has these pro pros and cons. One of the biggest issues is that penny crank isn't a guaranteed thing. It's not like, hey, I'm going to do this for two weeks and I'm going to be top five positions or whatever. Whichever tool that you use for determining how many sales you need per day to rank properly, is it helium or the roa or this new tool, I think it's called scope, salt scope, pretty good one. Whatever you use, it doesn't necessarily guarantee that that amount of sales will bring you to the top three or top five. You still have to get in, spend some money and see what is the situation because on Amazon everything is changing and sometimes other competitors are having their tools set up in a way that when you start aggressively to attack their their keywords which are they have good organic positions. They will increase their budgets automatically in bids to fight you back. Also, what's necessary for this tactic to work properly is enough reviews. Now, that's a pain point that everybody has, but when you have at least wine reviews, then it's a it's a good thing to start with this strategy. And also, one of the most important things is the cash flow pressure because you're basically paying for this increased ad spend. It could be substantial amount of of money and then we evaluate that 30 to 60 days cash cycle from from Amazon for they pay. So that that can be a burden. But then again, uh you wouldn't be doing everything that I just mentioned if you don't have already some additional cash to spend. When all of this finishes, it's not going to happen instantly, but over time, you will see that your organic ranks are catching up. You will be lowering your advertising spend. Your margin is going to be better and better because your a cost is going to improve. You have organic sales. You have good rankings. everything will turn out as it should. But sometimes it really takes time. It can be two weeks, it can be two months. Nobody guarantees that. You should know that because you're starting in a new category or maybe this is a new launch. So this is just one of the way to look at it. It's not not necessarily you should expect that you'll be profitable at the start or to lose money at 200 day cost or whatever. This is somewhere in between. You can just advertise the break even and it can be a pretty good strategy if executed well. Let me know if you have any further questions in the comments and see you in the next video. Bye-bye.