Amazon Ads Bidding Strategies Explained: Why Up & Down Wastes Your Budget

Published on September 25, 2025

About this video

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In this video, we break down the truth about Amazon campaign bidding strategies and explain why some bidding options can quickly destroy your Amazon PPC performance. If you are running Amazon advertising campaigns and struggling with high ACoS, out-of-control CPCs, or wasted ad spend, this video will show you what to avoid and how to set up your campaigns for more control and profitability.

Using a real seller account as an example, we walk through how improper campaign structure and the wrong bidding strategy can lead to wasted ad dollars. You’ll see why the "Dynamic Bids – Up and Down" setting is one of the worst options for Amazon PPC and why Amazon often promotes it even though it makes little sense for sellers.

Key points covered include how to structure campaigns and how to make small, controlled changes to your bids to avoid sudden drops in traffic or sales. We also look at real examples of CPCs skyrocketing under Up and Down bidding and explain step by step how to transition your campaigns safely to Down Only or Fixed Bids without derailing performance.

We’ll also discuss how placement adjustments (like Top of Search multipliers) stack on top of bidding strategies and why this can make Up and Down even more dangerous. Finally, we provide actionable steps to gradually adjust your bids and maintain healthy ACoS, better conversion rates, and more predictable advertising costs.

Whether you are just starting with Amazon PPC or already running multiple campaigns, this video will help you gain more control over your Amazon advertising and avoid costly mistakes.

*Contents* 00:00 Introduction and what the video is about 00:16 Why campaign structure matters for scaling and control 01:39 Why you should never use "Dynamic Bids – Up and Down" 02:28 Key differences between Down Only and Fixed Bids 03:19 Real account example of CPC inflation with Up and Down 05:30 How to safely switch bidding strategies and adjust bids 07:46 Why gradual bid changes are essential for stable results 08:41 Using Fixed Bids and placement adjustments for more control 09:03 Final takeaway: avoid Up and Down bidding at all costs

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Transcript

Hi guys, and welcome to another video. In this video, I will be talking about different campaign bidding strategies, why not to use some of them, and what are the preferred ones to be used all the time. So, here I have one of the accounts that is is absolutely state of horror in terms of how it is structured, and how it's performing. So, immediately you can see that it's not a big spend per month, but still, you know, $350, 400 in sales, ACOS is at 87. But, that's not the main issue here, because I keep talking about if you want to have your campaigns uh set up that way so you can scale, grow, and control where you're spending and where you're not spending, and be in absolute control over what's happening now, and be prepared for the future, you need to follow a certain rules. Those rules include having one campaign, one ad group, and in in that one one ad group, I prefer to have one single product, with the exception where there can be a range of products, which may be be different only in sizes, but that's another topic for variations, because advertising variations has also some of the uh dos and don'ts. But, the one thing that I really like loved to to have is one single match type per ad group, and the most important thing, never absolutely never use bidding strategy of up and down. Now, this is the account that I just started working on, and you will see what happens when you use dynamic bids and up and down. The the three of the available bidding strategies, one is fixed bids, the other one down only, and the the the worst one is up and down. For some reason, I keep seeing recommendations from Amazon reps that appear inside different accounts that they love dynamic bids up and down, which is understandable understandable from the point of view of profit for for Amazon from advertising, but for you as a seller, that doesn't make any sense. So, keep focusing on these two only. In one other video, I will cover the difference between down only and fixed bids. The difference is not that big, but in short, um with using down only, you let Amazon algorithm bid lower when you don't want to uh when when the algorithm detects that you're not not likely it's not likely that you're going to win the auction and have to to win the placement. While on fixed bids, um you you absolutely want to be part of the auction. Um Now, let's move on to what's happening. So, it's not a big daily budget, but still, I want you to see what's happening in the actual account. So, here um is the situation when you have that setting with dynamic bid up and down, Amazon is automatically increasing your bid and decreasing depending on the chances that you win on the auction and that your ad is going to be shown. So, you set your budget you sorry, your bid at $1.7, and what ends up happening is that on average you're paying 2.63. And then, that would be okay in some rare occasions where the um performance is good. I've only seen a few of those in in my last 8 years of doing this. But, for example, take a look at this one. So, this is al- already high bid, so 4. $4.9, and the CPC is 5.95, which is ridiculous, you know? But, the even worse thing here is that how can you now control the bid and control the CPC when you have that dynamic up and down? With dynamic up and down, Amazon can increase your bid up to 100% up and 100% down. So, if you put a bid of $2, it they they can bid up to um what is it? $4. So, here, if you want to lower your CPC because it it's it's not profitable for you, you lower this one to I don't know, three, and still Amazon can lift it up up to six. So, you don't have any control on what's happening. So, you can go as low as you like, you can go to or down to one, but still, maybe that's not even enough, because you have that 100% plus or minus, not to mention if you have some additional bid adjustments, that's stacking on top of that. So, if you have bid adjustments for top of search because you have the best click-through rate and conversion rate on top search, and you have bid up and down, so you have up and down increasing your bid by 100%, and top of search that increases your bid on top of search placements by additional 300, you know, the math is is clear that you will have absolutely no control on what's happening. So, what is the solution? Solu- solution is, of course, to switch to down only or fixed bids. You can choose whatever you like. I usually from from up and down, I usually switch to down only, but it's not only that. Now, if you switch to down only, please note that your bids now can be at maximum 4.09. So, in this occasion, or let's take the upper one, 1.70. So, immediately if you do that switch, now, for the rest of the day, your bids can be at maximum 1.7, because currently it's 2.63 on average. That means that some of the clicks are going up to $3.4, some of them are going down to I don't know, 80 cents, and on average you have 2.63. So, the the shift is going to be too much, you know? Because on Amazon, you should look uh when when advertising, you should you should uh look at the changes that you plan to make as a freight train. So, you only have to you only need you you should be only changing your direction slightly, you know, to the left or or right. If you make a hard turn, your train's going to derail. So, here, what I usually do is that I switch to down only, and then I like to increase this little bit just a little bit, depending on the results. So, here, we have six orders for 12% conversion rate, the ACOS is 75%. So, in let's say that I'm okay with this one, you know? Uh please note these additional brackets in red and here, that's my extension that I created using ChatGPT that uh this is the conversion rate that I like to see, and this is cost per sale that I like to check. So, anyway, let's say that I want to have somewhere at 2.4 at maximum, then I will uh put my bid not to 2.4, but I would put it to maybe 2.6, 2.7 for the first time, and then um you will have to let it to let it run for a few days, let's say three, four, five days, depending on the on the volume of traffic that you have in a campaign, to see the performance, and expect that it's going to go to go down. That's normal, but you know, there is no farm in sales going down when you have 87% of ACOS. So, that's okay. You don't want to have big sales uh numbers on in this occasion, unless it's a um you know, a ranking campaign, but still, even for a ranking campaign, you don't want to have up and down. Anyway, so you you will have to let it go for a while, three or four days until the data settles in, and you start to see what you need to increase more or what you need to decrease even more. So, and that's going to give you some control, not some, but extra control over what's happening. For a even higher control, you can switch to fixed bids, and then you can layer on top of that top of search um placement adjustments or any other placement adjustments, plus if you add your audience from AMC or whatever there is, business placements, everything is stacking. So, you need to be aware of what you're bidding. So, avoid as a takeaway, avoid using bids up and down at all costs, uh and you'll be good. That would be it. So, be careful with changing this. It's not a simple change from up and down to down only or fixed bids. You need to also adjust your bids just a little bit up and down to hit your desired cost per click and the other metrics that matter to you, being ACOS or um cost per per acquisition or whatever it is. So, stay tuned, and see you in the next video. Bye-bye.

Frequently asked questions

What are the three Amazon Sponsored Products bidding strategies and which should you avoid?

The three options are Fixed Bids, Dynamic Bids Down Only, and Dynamic Bids Up and Down. Fixed Bids means Amazon submits exactly the bid you set in every auction with no algorithmic adjustment. Down Only allows Amazon to reduce your bid when it determines a conversion is unlikely but never increase it above your set amount. Up and Down allows Amazon to both reduce and increase your bid automatically by up to 100% in either direction depending on its assessment of the likelihood of a conversion. Up and Down is the option to avoid entirely. It removes meaningful control from the advertiser, inflates CPCs in ways that cannot be corrected by simply lowering the bid, and makes accurate ACoS management nearly impossible.

Why does Dynamic Bids Up and Down make CPCs unpredictable and difficult to control?

When you use Up and Down, Amazon can increase your bid by up to 100% above whatever amount you have entered. If you set a bid of 2 euros, Amazon can submit a bid of up to 4 euros in any given auction. If you then try to lower your CPC by reducing the bid to 1 euro, Amazon can still bid up to 2 euros, which may still be above what you wanted to pay. The problem compounds significantly when placement adjustments are layered on top. If you have a top-of-search placement adjustment set at 300%, Amazon first applies the Up and Down increase of up to 100%, and then applies the placement multiplier on top of that. A 2-euro base bid can effectively become an 8-euro bid or higher in top-of-search auctions, which makes it impossible to set a meaningful ceiling on what you are paying per click.

How do you safely switch from Dynamic Bids Up and Down to Down Only without causing a sudden drop in traffic?

The risk in switching directly is that the bid you currently have set was the input to Amazon's Up and Down algorithm, not the actual CPC being paid. If your average CPC under Up and Down is 2.63 euros but your entered bid is 1.70 euros, switching to Down Only immediately caps bids at 1.70, which can cut traffic sharply and feel like a campaign failure. The safe approach is to switch the bidding strategy to Down Only and simultaneously increase the entered bid to a level closer to your current average CPC, such as 2.60 or 2.70 euros, rather than leaving it at the lower number. Then allow three to five days for the campaign data to settle before making further bid adjustments, watching CPCs and ACoS rather than reacting to a single day's performance.

When should you use Fixed Bids versus Down Only, and how do placement adjustments interact with each?

Down Only is the right default for most campaigns because it allows the algorithm to lower bids in lower-quality auctions while keeping your maximum CPC predictable. Fixed Bids are most appropriate when you want absolute control over the bid in every auction, particularly in single keyword ranking campaigns where the entire strategy depends on winning a specific placement at a specific price. With Fixed Bids, every placement adjustment you add, whether for top of search, product pages, or AMC audiences, stacks on top of the fixed base bid in a fully transparent and calculable way. This makes it possible to set a precise effective bid for top-of-search placements by choosing a base bid and a percentage adjustment that multiplies to the target CPC, which is not possible with the variable output of Down Only.