Amazon is milking the advertising cow for all it can. But the cow is already sick. Keep going and it will die.
Our decent selling products always shows up twice on the same page. One as sponsored, the other as itself. We do need a sponsored listing next to the actual listing.
This morning I see one of our products being displayed THREE times. Two next to each other, the third just one row below. Two of them are sponsored.
When we started advertising campaigns in 2016 the ACOS was about 8%.
It kept climbing steadily until it reached almost 40% in early 2023. We tweaked, we used software, we watched and corrected manually, with only some improvement.
We dramatically cut our on Amazon advertising budget. Products that do not sell well without advertising were dropped (excluding new launched items.
Our cash flow greatly improved. We now have much better breathing space.
Amazon is generating tens of billions annually in advertising fees. But as sellers see their cost going north while sales stay flat, they are doing what we are doing.
Keep going Amazon. Revenue will still go up for a year or two then the cow will die....
30 replies
SEAmod
Hi @Seller_8sP6ffckcRn6v
Thanks for sharing your opinion regarding advertising on Amazon. I hope other sellers will realize that they should understand the cost of doing business on Amazon, and then adjust their business model as needed.
Susan
Seller_HRcJa1gdGHeov
I have long suspected that Amazon's profits are stemming from 3P seller ad fees.
I felt Amazon removing items due to safety, suspected IP, and price stream line the catalog and make advertising more effective or at least appear that way.
Seller_x6o9Gvi16YLhJ
I'm just doing the same here... Managed to reduce TACOS from 11% to 2.5% in 4 months.
We dramatically cut our on Amazon advertising budget. Products that do not sell well without advertising were dropped (excluding new launched items.
Seller_VnjWaIFTWXcPS
I suspect that Amazon Ad spend algorithms are written so that Ad spend fees will be 30% minimum of the sales. Meaning the advertising fees for a $10 sales are a minimum of $3. But the unfortunate part is the manufacturing, fba fee etc will be about $5-$6 for the seller. So the profit will be at most $1 or $2. This is a hypothetical calculation. but what I have seen in my observations. Anyone feel the same way?
Seller_A6A6GUNuplT1Z
Right?! I went from seeing $7 to $8 per $1 spent on amazon advertising 4 years ago, compared to now which has dropped down to $2-$4 per $1 spent.
Seller_4HsL3GZbyDLea
Amazon intentionally manipulates everything. The PPC is just another facet of the manipulation. There is nothing organic and natural about this Amazon selling experience anymore.
Seller_4K7eqIN4GuF2E
Anything that Scamazon offers to increase business is exclusively to increase their profits at your expense.
Seller_PLOZ3wYKylTni
We've been selling on Amazon since 2014 and we're seeing the same thing. No matter how optimized our manual campaigns are, we are spending 4 times the amount for about half the sales we used to see. On top of that our ACOS has risen about the same as you're seeing. It used to be between 8-10% and now we struggle to keep it under 40%... which means we're losing money. Add to that the new "low inventory fee" (please read this as a penalty for developing fast selling products that you can't get fast enough) and the writing is on the wall. We've cut more than half our advertising for over a month now. For those brands one was slightly affected and the other is selling better than ever... go figure. That's a $4,000 savings for us that will now help pay the $2,500/month low inventory fees we're getting.
Seller_Lv2DsX2NMF2a6
Thanks for sharing.
We used to invest +1 M/year on ads.
Same as you, we started doing the same. We cut the ad budget as we struggled to keep a decent ACOS and we failed no matter the optimisation we have done, either manual or software based.
As you did, we'll focus on the products which have traction without ads and on the new products.
We are expanding on other platforms and we'll invest on our own website.
However, I doubt that Amz will kill the cow as the new sellers will feed it. They need time to understand what we have learnt after an investment of couple of millions in ads.
Good luck!
Seller_c0Gx7T3fTXFbW
Amazon is skinning the sheep so eventually there will be no wool to harvest.
Amazon is milking the advertising cow for all it can. But the cow is already sick. Keep going and it will die.
Our decent selling products always shows up twice on the same page. One as sponsored, the other as itself. We do need a sponsored listing next to the actual listing.
This morning I see one of our products being displayed THREE times. Two next to each other, the third just one row below. Two of them are sponsored.
When we started advertising campaigns in 2016 the ACOS was about 8%.
It kept climbing steadily until it reached almost 40% in early 2023. We tweaked, we used software, we watched and corrected manually, with only some improvement.
We dramatically cut our on Amazon advertising budget. Products that do not sell well without advertising were dropped (excluding new launched items.
Our cash flow greatly improved. We now have much better breathing space.
Amazon is generating tens of billions annually in advertising fees. But as sellers see their cost going north while sales stay flat, they are doing what we are doing.
Keep going Amazon. Revenue will still go up for a year or two then the cow will die....
Amazon is milking the advertising cow for all it can. But the cow is already sick. Keep going and it will die.
Our decent selling products always shows up twice on the same page. One as sponsored, the other as itself. We do need a sponsored listing next to the actual listing.
This morning I see one of our products being displayed THREE times. Two next to each other, the third just one row below. Two of them are sponsored.
When we started advertising campaigns in 2016 the ACOS was about 8%.
It kept climbing steadily until it reached almost 40% in early 2023. We tweaked, we used software, we watched and corrected manually, with only some improvement.
We dramatically cut our on Amazon advertising budget. Products that do not sell well without advertising were dropped (excluding new launched items.
Our cash flow greatly improved. We now have much better breathing space.
Amazon is generating tens of billions annually in advertising fees. But as sellers see their cost going north while sales stay flat, they are doing what we are doing.
Keep going Amazon. Revenue will still go up for a year or two then the cow will die....
30 replies
30 replies
SEAmod
Hi @Seller_8sP6ffckcRn6v
Thanks for sharing your opinion regarding advertising on Amazon. I hope other sellers will realize that they should understand the cost of doing business on Amazon, and then adjust their business model as needed.
Susan
Seller_HRcJa1gdGHeov
I have long suspected that Amazon's profits are stemming from 3P seller ad fees.
I felt Amazon removing items due to safety, suspected IP, and price stream line the catalog and make advertising more effective or at least appear that way.
Seller_x6o9Gvi16YLhJ
I'm just doing the same here... Managed to reduce TACOS from 11% to 2.5% in 4 months.
We dramatically cut our on Amazon advertising budget. Products that do not sell well without advertising were dropped (excluding new launched items.
Seller_VnjWaIFTWXcPS
I suspect that Amazon Ad spend algorithms are written so that Ad spend fees will be 30% minimum of the sales. Meaning the advertising fees for a $10 sales are a minimum of $3. But the unfortunate part is the manufacturing, fba fee etc will be about $5-$6 for the seller. So the profit will be at most $1 or $2. This is a hypothetical calculation. but what I have seen in my observations. Anyone feel the same way?
Seller_A6A6GUNuplT1Z
Right?! I went from seeing $7 to $8 per $1 spent on amazon advertising 4 years ago, compared to now which has dropped down to $2-$4 per $1 spent.
Seller_4HsL3GZbyDLea
Amazon intentionally manipulates everything. The PPC is just another facet of the manipulation. There is nothing organic and natural about this Amazon selling experience anymore.
Seller_4K7eqIN4GuF2E
Anything that Scamazon offers to increase business is exclusively to increase their profits at your expense.
Seller_PLOZ3wYKylTni
We've been selling on Amazon since 2014 and we're seeing the same thing. No matter how optimized our manual campaigns are, we are spending 4 times the amount for about half the sales we used to see. On top of that our ACOS has risen about the same as you're seeing. It used to be between 8-10% and now we struggle to keep it under 40%... which means we're losing money. Add to that the new "low inventory fee" (please read this as a penalty for developing fast selling products that you can't get fast enough) and the writing is on the wall. We've cut more than half our advertising for over a month now. For those brands one was slightly affected and the other is selling better than ever... go figure. That's a $4,000 savings for us that will now help pay the $2,500/month low inventory fees we're getting.
Seller_Lv2DsX2NMF2a6
Thanks for sharing.
We used to invest +1 M/year on ads.
Same as you, we started doing the same. We cut the ad budget as we struggled to keep a decent ACOS and we failed no matter the optimisation we have done, either manual or software based.
As you did, we'll focus on the products which have traction without ads and on the new products.
We are expanding on other platforms and we'll invest on our own website.
However, I doubt that Amz will kill the cow as the new sellers will feed it. They need time to understand what we have learnt after an investment of couple of millions in ads.
Good luck!
Seller_c0Gx7T3fTXFbW
Amazon is skinning the sheep so eventually there will be no wool to harvest.
SEAmod
Hi @Seller_8sP6ffckcRn6v
Thanks for sharing your opinion regarding advertising on Amazon. I hope other sellers will realize that they should understand the cost of doing business on Amazon, and then adjust their business model as needed.
Susan
SEAmod
Hi @Seller_8sP6ffckcRn6v
Thanks for sharing your opinion regarding advertising on Amazon. I hope other sellers will realize that they should understand the cost of doing business on Amazon, and then adjust their business model as needed.
Susan
Seller_HRcJa1gdGHeov
I have long suspected that Amazon's profits are stemming from 3P seller ad fees.
I felt Amazon removing items due to safety, suspected IP, and price stream line the catalog and make advertising more effective or at least appear that way.
Seller_HRcJa1gdGHeov
I have long suspected that Amazon's profits are stemming from 3P seller ad fees.
I felt Amazon removing items due to safety, suspected IP, and price stream line the catalog and make advertising more effective or at least appear that way.
Seller_x6o9Gvi16YLhJ
I'm just doing the same here... Managed to reduce TACOS from 11% to 2.5% in 4 months.
We dramatically cut our on Amazon advertising budget. Products that do not sell well without advertising were dropped (excluding new launched items.
Seller_x6o9Gvi16YLhJ
I'm just doing the same here... Managed to reduce TACOS from 11% to 2.5% in 4 months.
We dramatically cut our on Amazon advertising budget. Products that do not sell well without advertising were dropped (excluding new launched items.
Seller_VnjWaIFTWXcPS
I suspect that Amazon Ad spend algorithms are written so that Ad spend fees will be 30% minimum of the sales. Meaning the advertising fees for a $10 sales are a minimum of $3. But the unfortunate part is the manufacturing, fba fee etc will be about $5-$6 for the seller. So the profit will be at most $1 or $2. This is a hypothetical calculation. but what I have seen in my observations. Anyone feel the same way?
Seller_VnjWaIFTWXcPS
I suspect that Amazon Ad spend algorithms are written so that Ad spend fees will be 30% minimum of the sales. Meaning the advertising fees for a $10 sales are a minimum of $3. But the unfortunate part is the manufacturing, fba fee etc will be about $5-$6 for the seller. So the profit will be at most $1 or $2. This is a hypothetical calculation. but what I have seen in my observations. Anyone feel the same way?
Seller_A6A6GUNuplT1Z
Right?! I went from seeing $7 to $8 per $1 spent on amazon advertising 4 years ago, compared to now which has dropped down to $2-$4 per $1 spent.
Seller_A6A6GUNuplT1Z
Right?! I went from seeing $7 to $8 per $1 spent on amazon advertising 4 years ago, compared to now which has dropped down to $2-$4 per $1 spent.
Seller_4HsL3GZbyDLea
Amazon intentionally manipulates everything. The PPC is just another facet of the manipulation. There is nothing organic and natural about this Amazon selling experience anymore.
Seller_4HsL3GZbyDLea
Amazon intentionally manipulates everything. The PPC is just another facet of the manipulation. There is nothing organic and natural about this Amazon selling experience anymore.
Seller_4K7eqIN4GuF2E
Anything that Scamazon offers to increase business is exclusively to increase their profits at your expense.
Seller_4K7eqIN4GuF2E
Anything that Scamazon offers to increase business is exclusively to increase their profits at your expense.
Seller_PLOZ3wYKylTni
We've been selling on Amazon since 2014 and we're seeing the same thing. No matter how optimized our manual campaigns are, we are spending 4 times the amount for about half the sales we used to see. On top of that our ACOS has risen about the same as you're seeing. It used to be between 8-10% and now we struggle to keep it under 40%... which means we're losing money. Add to that the new "low inventory fee" (please read this as a penalty for developing fast selling products that you can't get fast enough) and the writing is on the wall. We've cut more than half our advertising for over a month now. For those brands one was slightly affected and the other is selling better than ever... go figure. That's a $4,000 savings for us that will now help pay the $2,500/month low inventory fees we're getting.
Seller_PLOZ3wYKylTni
We've been selling on Amazon since 2014 and we're seeing the same thing. No matter how optimized our manual campaigns are, we are spending 4 times the amount for about half the sales we used to see. On top of that our ACOS has risen about the same as you're seeing. It used to be between 8-10% and now we struggle to keep it under 40%... which means we're losing money. Add to that the new "low inventory fee" (please read this as a penalty for developing fast selling products that you can't get fast enough) and the writing is on the wall. We've cut more than half our advertising for over a month now. For those brands one was slightly affected and the other is selling better than ever... go figure. That's a $4,000 savings for us that will now help pay the $2,500/month low inventory fees we're getting.
Seller_Lv2DsX2NMF2a6
Thanks for sharing.
We used to invest +1 M/year on ads.
Same as you, we started doing the same. We cut the ad budget as we struggled to keep a decent ACOS and we failed no matter the optimisation we have done, either manual or software based.
As you did, we'll focus on the products which have traction without ads and on the new products.
We are expanding on other platforms and we'll invest on our own website.
However, I doubt that Amz will kill the cow as the new sellers will feed it. They need time to understand what we have learnt after an investment of couple of millions in ads.
Good luck!
Seller_Lv2DsX2NMF2a6
Thanks for sharing.
We used to invest +1 M/year on ads.
Same as you, we started doing the same. We cut the ad budget as we struggled to keep a decent ACOS and we failed no matter the optimisation we have done, either manual or software based.
As you did, we'll focus on the products which have traction without ads and on the new products.
We are expanding on other platforms and we'll invest on our own website.
However, I doubt that Amz will kill the cow as the new sellers will feed it. They need time to understand what we have learnt after an investment of couple of millions in ads.
Good luck!
Seller_c0Gx7T3fTXFbW
Amazon is skinning the sheep so eventually there will be no wool to harvest.
Seller_c0Gx7T3fTXFbW
Amazon is skinning the sheep so eventually there will be no wool to harvest.
