Negative expectations of people from a business on Amazon FBA after Launch
In conventional business, it takes 2+ years to turn your business into a profitable business while on Amazon people are reaching the break-even point within 3-6 months after launching successfully. This is not for all of the cases like around 17% said that it took 3-6 months to reach the break-even point and 16% said it took nearly 2 years until their business turned into a profitable business. So during the launch phase, you can expect at least 3 months until your business on Amazon turns profitable. And in those 3 months, you can expect at least 1/3rd of your total investment to be spent on PPC and giveaways so that your organic ranking is improved and you get sales easily.
The majority of brands who work with Amazon specialist Business Builders tend to achieve their goals within 2-3 months after launch as the Brand Builders know what strategies are required to get your first sale. Doing PPC and paid social media marketing tend to drive more sales but the real profit margin is sided with organic sales. As soon as you will start getting organic orders your cost would be lower. In some cases where competition is too high there, it might take 2 months to get their first organic sale. So you can say that the first drop is difficult then it all rains.
Most of the sellers fail to get their sales in the first 6 months as they are doing it all by themselves. It is recommended to let these things be handled by experts as it takes time in getting your desired sales. It is that PPC ad campaigns deliver results overnight but on average it takes three months to deliver the best possible results. These months after launch serve as a data-providing period for your ad campaign, providing you with vital data that can trigger your ad campaign performance.
As mentioned earlier, PPC on average takes three months to work and then quality results are produced that deliver long-lasting results. Some sellers make. The first three months of a PPC campaign should focus on gathering data from your ads, which you can then use to improve your keyword targeting, audience targeting, and bids.
When you are running PPC ad campaigns on Amazon, Amazon checks the quality of ads deeply like on which keyword you are bidding. The quality of bid triggers the performance of PPC and hence it greatly influences click-through rate (CTR), and relevancy. Metrics like CTR, ACoS, and CPC can vary from category to category as Amazon gathers more data about your product and your competitors. A product with 400 clicks versus 50 clicks has more data at the backend so a product with 400 clicks will rank higher. You can add more data by optimizing your listings with proper keywords constantly. More data will trigger more clicks and impressions plus at the end, you will start seeing results.
When you fully understand why it takes too long to get desired results from PPC ad campaigns, you can easily explain to executives how PPC requires a three-month investment, what makes PPC strategy a good strategy that is done for months and lasts for years.
Following are Factors that delay in ranking your Product on Amazon.
This is one of the main reasons that cause a delay in ranking a specific product as in the start ACoS is high as we have to bid higher to rank our product so Advertising Cost of Sales will be more than 100% like if you are spending $40 on PPC and you generated orders worth $40 then ACoS will be 100%. This is because your product is not getting enough clicks as it is new to the algorithm. In 2 -3 weeks you will see that your product will be getting more clicks and hence ACoS will be lowered automatically. We should always aim for 20-25% ACoS and in the end, we will reach 40% from 100%, but surely it takes time to reduce as Amazon takes time to optimize your listings and deliver results. It takes 3-4 weeks for Amazon to optimize and analyze according to its algorithm.
Keywords play an important role in ranking a product, when you bid on specific keywords and after a span of 2-3 weeks you see that some keywords are under performing so you select keywords that you want to do negative to save your costs. New keywords are to be added over time to increase the efficiency of PPC like if your product is not performing well on certain keywords then you can choose other keywords that are higher in demand and lower in competition. This is an ongoing process you will need to try different keywords to rank your product on top spots. It takes 3-6 months to reach organic rankings and surely it depends on your competition. After reaching your desired spots you will then have to maintain your organic rankings.
When a product is launched it has no reviews and hence it is not considered credible in eyes of clients and Amazon’s A10 Algorithm. By the time reviews are built then your product will start ranking on top spots. As mentioned earlier it takes time for the Algorithm to learn that your product is credible if the products that are ranking on top pages have 100 reviews each then you will also need to build reviews to rank accordingly. Your ranking will also improve if you meet the daily sales of your competitors. So being patient is the key to success. After PPC when you will get 10-15 reviews over a span of 2-3 weeks then your ranking will start improving as Amazon’s algorithm will mark you as credible and safe to be ranked. There are cases in which we can see less number of reviews products are being ranked in top 3 pages that are only due to Algorithm marked them as credible.
This rule states that at first 70% of our orders are from PPC while 30% are only from organic orders. It also states that Amazon lists 70% of organic listings on top spots while only 30% are sponsored products. So you will have to compete within the 30% area provided to get your desired rankings. To optimize your listings accordingly if Amazon thinks your listing is relevant then it is going to rank properly and convert your 70% PPC generated orders to 30%. It takes time to convert 70 into 30 and 30 into 70 this is not done overnight it takes at least 3 months to reach ACoS 30%. If your product is relevant to the category and sub-category then it will be able to rank else it will just waste resources. For example, gloves will rank in the clothing category not in Kitchen items even if you think gloves are used in baking but surely it will rank when placed in the relevant category.
Listing Date of Birth
This is also one of the important factors as new sellers have hurdles like they have to bid high to achieve ranking while a person who is selling for the last 6 months will have to pay less and eventually his rankings will improve as the Algorithm give an edge to old sellers as compare to new sellers. This shows that you need to wait to get results that will be long-lasting there is no magic trick that you will launch a product and sales will be on your doorstep. Amazon Business is for those who know that they have to wait for the crop to yield its fruits no one has become a millionaire legally in a matter of 2-3 weeks.