Amazon Ads Bidding: When to Use Dynamic Bids vs Fixed Bids

Published on November 10, 2025

About this video

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Learn how to choose the right bidding strategy for your Amazon advertising campaigns. This comprehensive guide covers the key differences between dynamic bids down only and fixed bids, helping you make informed decisions for better Amazon PPC performance.

In this video, I explain the three main bidding options available in Amazon ads campaigns: dynamic bids up and down, dynamic bids down only, and fixed bids. I break down why dynamic bids up and down might not be the best choice for most Amazon advertising campaigns, as it gives too much control to the Amazon algorithm.

You'll discover the crucial difference between your bid and your actual cost per click (CPC). Even if you bid $100 for a keyword, you won't necessarily pay that amount. The Amazon ads auction system works on a second-price auction model, where you pay just one cent more than the second-highest bidder. This means if you bid $100 but your closest competitor bids 50 cents, you'll only pay 51 cents.

Dynamic bids down only works best for established Amazon PPC campaigns with solid conversion rates and sufficient data. The algorithm can lower your bids by up to 100%, meaning it might completely skip auctions when it calculates your product is less likely to win. This bidding strategy is ideal when you have proven campaign performance and want the algorithm to optimize based on conversion probability.

Fixed bids give you complete control over your Amazon advertising spend. You bid exactly what you set, up to your maximum bid amount. If competitors outbid you, you won't get clicks, but if they bid lower, you'll win the auction at just one cent above their bid. This approach is perfect for new product launches, single keyword campaigns, and any situation where you need absolute control over your Amazon PPC bidding strategy.

This Amazon advertising tutorial is essential for anyone managing Amazon ads campaigns, whether you're launching new products or optimizing existing Amazon sponsored products campaigns. Understanding these bidding strategies will help improve your Amazon PPC optimization and overall campaign performance.

Contents: 0:00 Amazon Advertising Bidding Strategy Overview 0:05 Dynamic Bids Up and Down Limitations 0:33 Understanding Bid vs CPC in Amazon Ads 0:59 Dynamic Bids Down Only for Established Campaigns 1:32 Fixed Bids for Complete Control 2:04 Best Use Cases for Each Bidding Strategy

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Transcript

short advertising tips. So, how to choose the right advertising bidding strategy? So, you have options dynamic bits up and down, dynamic bits down only, and fixed bits. I'm going to speak dynamic I'm going to skip the dynamic bits up and down because I think it's completely useless. Um I know there are some use cases maybe but I don't like leaving uh so many decisions to the Amazon algorithm for many different reasons. So uh I would talk about dynamic bits only and fixed bits. The it's important to to understand the difference between the bid and the CPC. So you can bid $100 for a single keyword. It doesn't mean that you will pay $100 for that keyword. Unless there is somebody else that crazy to bid that high, nothing's going to change. So, you can bid $100 and if somebody else is bidding 50 cents, you're going to pay 51 cent. So, it's how the auction works. It's the second highest um um wins. So uh dynamic bits I would only use in the already established campaigns where you see a solid conversion rate the algorithm had enough of data to actually knows what works and what what's not and can lower the bids uh if it calculates that it's not it's less likely that your auction your product's going to win. Now, it's important to note that this dynamic bids down only can lower your bid by 100%. Meaning that you will not bid anything. Will completely skip the auction. On the other side, fixed bids will let you bid as aggressively as you like. So, bid as as much as high as you can. So it's not g it doesn't mean again that you will be having exact CPC as your bid is you will only be paying up to the let's say if you were bidding $10 you're going to maximum bid up to $10. So if somebody else over bids you that's it you know you're not going to see any click but if somebody's all the other competition are bidding $5 you will win by $51. So, pix bits are really great for uh new product launches when you have your single keyword campaigns and the other campaigns from the launch package and you want to be sure that you are actually in the auction and algorithm is not skipping your product. Also good for a relaunches and in general for all the the campaigns that you want to have an absolute control over what's happening with the with the bits. So, see you in the next video. Thank you for watching. Bye-bye.

Frequently asked questions

If you set a bid of $10 for a keyword, will you actually pay $10 per click?

Almost certainly not. Amazon uses a second-price auction model, meaning you pay one cent more than the second-highest bidder's bid, up to your maximum. If you bid $10 but all competing advertisers bid $2 or less, you win the auction and pay approximately $2.01. You only pay your full bid if a competitor bids just below your amount. This means setting a high bid to ensure auction wins is often less costly than it appears, since actual CPCs are determined by the competitive floor, not by your ceiling. Understanding this prevents sellers from unnecessarily limiting bids out of fear of paying the entered amount.