Although Amazon focuses on products rather than stores, in-site advertising can still increase store exposure to a certain extent. It makes sense that advertising costs money. Many sellers may not have much liquidity, so they hope to make plans in advance and budget advertising expenses. Advertising budget does not mean that you can only spend so much money on it. In most cases, advertising is just a means to adjust exposure.
On the premise that the product sales price is reasonable and the product quality is OK, we also need to:
First, test the conversion rate of the listing page in advance and calculate the number of orders that reach the pop-up standard every day;
Second, analyze the fierce market competition of similar products and the same industry (this step is actually the preliminary work);
Third, sales volume = UV*conversion rate (if it is based on order conversion rate, it needs to be multiplied by the average purchase quantity per person), budget = number of clicks*click price (not counting natural traffic).
Regarding advertising expenses, there are two standards for your reference:
First, advertising investment sales ratio. Advertising expenses on the day/total sales of the store on the day ≤5%. Use this standard to measure whether the overall daily advertising expenditure is reasonable, so that the net profit can be kept at a relatively ideal value in the end. Of course, it also applies to the allocation to a single SKU.
Second, the advertising sales contribution ratio. Advertising sales on the day/total store sales on the day. This value varies with the promotion cycle and product cycle. The new product diversion period may be above 50%, 25% in the middle term, and below 10% in the later period (mainly natural traffic and has stabilized).
For the above ratios, the seller will have a rough reference value after long-term operation, and finally according to the rated order target: advertising cost = advertising sales * ACOS.
Based on the rated order target, advertising cost = customer unit price * target number of orders * and ACOS.
The above formula can help people make more efficient and comprehensive plans and choices when making rough plans and budgets. In most cases, advertising brings added value and may not bring high conversion rates. The demand for traffic may be exactly what we want.