For example, let’s say you’re selling a set of drumsticks. You bought them for $5, and you’re selling them for $7. That’s a very low profit margin, you only make $2. If you run an ad that costs you a dollar, now you only have a dollar left, not even factoring in Amazon fees or shipping costs.
A better situation is if I bought an item for $10 and sold it for $20. I’m making 100% profit, because I got my $10 back, plus another $10. Out of that $10 profit, I take out 15% of the retail price for Amazon’s fees, then a little more for advertising. I’m still going to make a decent profit.
One of the things I do in my blogs is make sure to give you the top 20% tips on how to do something. I follow the Pareto principle thats states 80% of your growth comes from 20% of your input. For example, in a retail store, most likely 80% of their profits are coming from 20% of their products. I do the same thing with my blogs: there’s no way I can share every single thing with you, so I give you the top 20% of information I can that can help you be as successful as possible as quickly as possible.
Let's go over how to set up an ad campaign on Amazon.
First, find a product you want boosted sales for. Make sure it has a sufficiently large profit margin. The product may be dead and not moving, or it could be doing well, but you feel it could do better.
Next, hover over “Advertising” and click on “Campaign Manager”.
From here, click on “Create campaign”.
Give your campaign a campaign name, I'll call mine "Fuel pumps" for this example since that's the item I want to promote.
Then pick a daily budget. A daily budget is simply how much you are willing to spend on this campaign in one day. I’ve already decided I can spend $90 on my fuel pump advertisement over the next month, so I’m willing to spend up to $3 per day. This is not a guarantee I’m going to spend $3/day, but that $3 is the max. Often times, not all of your budget is used up in a day and you end up spending less.
Pick a start and end date for your campaign.
Then select a targeting type: automatic targeting or manual targeting.
I recommend automatic targeting. If someone is surfing on Amazon, looking for a drum set, then they find one and start looking for accessories to go with it, then is the perfect time for Amazon to display an ad for your drumsticks on the side.
If I as a customer am already thinking about a drum set, I’ll be more likely to get drumsticks along with it. I’m already in that mindset. Now, if a bottle of shampoo popped up instead, there is a very slim chance I'm going to click on it. I'm thinking about buying a drum set, not shampoo!
This is what automatic targeting does. Amazon takes care of targeting your ad to people who are already interested in something similar to what you’re trying to sell. Amazon tracks where they’re clicking so they can provide relevant ads to that person. It’s very targeted and focused, a sniper rather than a shot gun.
Now I have my settings selected, I’m going to give the ad group name. This is the name for a group of ads under this campaign. You can later go and set up multiple groups of ads after you start the campaign, so this name helps you distinguish them from each other. I’ll leave it as the default Ad Group 1.
Choose your product by searching its name, hit select, and move on.