Guidelines and recommendations for Amazon sellers for the optimal ratio between Organic versus Ad Sales and how to reduce your ACoS on Amazon
Many Amazon sellers have been asking about the optimal ratio between their organic versus ad sales. The answer to that question is…..it depends.
Most guidelines refer to a ratio of 25/75 where advertising makes up 25% of sales and organic sales make up 75% of total sales but this can vary depending on the product’s life cycle stage.
When launching a new product the ratio will be different. During the first couple of months, your goal is for the new product to gain credibility by obtaining ratings and reviews. At this stage, most of the sales will be driven by advertising using your Amazon PPC strategy and a 25/75 ratio is not feasible.
If an existing product has a good profit margin then you have more space for PPC optimization.
Once in a while, you should try testing a good product that is running well on an existing campaign. Start by slowly decreasing your daily budget and check what happens. If your overall sales are not affected, this is because your organic position is doing well for most keywords. By doing this simple test, you can reduce your ACoS and increase profitability.
This following tutorial discusses the ratio considerations and provides tips to achieve a good ratio between your organic and advertising sales.
The search term isolation approach can help you achieve a good ratio over time.