Amazon PPC for Beginners: A No-BS Guide

You're about to waste your first $500 on Amazon PPC if nobody tells you how it actually works. I've watched hundreds of new sellers light money on fire because they followed some generic tutorial, launched five campaign types simultaneously, and then panicked when their ACoS hit 90%. I'm going to save you that tuition. After managing $205M+ in Amazon sales across 50+ brands, I've seen every beginner mistake in the book — and I've reverse-engineered what actually works when you're starting from zero.

What Is Amazon PPC and How Does It Work?

Amazon PPC is pay-per-click advertising inside Amazon's marketplace. You bid on keywords. When a shopper searches that keyword and clicks your ad, you pay your bid amount. If they don't click, you pay nothing.

That's the mechanic. Here's what actually matters:

Amazon PPC directly influences your organic ranking. When your product generates sales through PPC ads, Amazon's algorithm interprets that as a signal that your product is relevant for those keywords. More PPC sales on a keyword = higher organic ranking for that keyword. Over time, your organic sales grow and your dependence on paid ads decreases.

This is the flywheel. PPC isn't just advertising — it's a ranking tool. Beginners who understand this outperform beginners who treat PPC as a simple "pay for clicks" game.

Which Amazon Ad Type Should Beginners Start With?

Start with Sponsored Products. Only Sponsored Products. Nothing else.

Amazon offers three ad types:

• Sponsored Products — ads for individual product listings that appear in search results

• Sponsored Brands — banner ads at the top of search showing your brand and multiple products

• Sponsored Display — retargeting and audience-based ads on and off Amazon

Sponsored Brands and Sponsored Display are powerful tools. But they're advanced tools. They require brand registry, they have different optimization levers, and they'll confuse you if you're still learning basic campaign management.

Sponsored Products are simple: one product, keywords, bids. Master these first. Add the others once you're consistently profitable.

How to Pick Your First Amazon PPC Keywords

Don't overthink this. You need three sources of keywords to start:

1. Your listing. Read your own title, bullet points, and description. Pull out every relevant keyword and phrase. If it describes your product, it's a candidate. 2. Competitor listings. Look at the top 5-10 competitors in your niche. What keywords appear in their titles? Their bullet points? Tools like Helium 10's Cerebro can reverse-engineer their keyword rankings, but even manual inspection works. 3. Amazon's search bar. Start typing your main keyword and see what Amazon auto-suggests. These are real searches from real shoppers. Write them all down.

For your first campaigns, aim for 15-25 keywords. That's enough to generate data without spreading your budget too thin. Pick keywords that are directly relevant to your product — not aspirational keywords where you'd be competing against established brands with 5,000 reviews.

How to Set Initial Bids and Budget for Amazon PPC

Here's the framework:

Starting bids: Use Amazon's suggested bid as your baseline. For your first campaigns, bid at the suggested amount or 10-20% above it. You need impressions to get data. You can always lower bids later — but if you bid too low from the start, you get zero data and learn nothing. Daily budget: Set a minimum of $20-$30 per campaign per day. I know that sounds like a lot if you're bootstrapping. But $5/day campaigns don't generate enough clicks to produce statistically meaningful data. You'll wait weeks to learn what you could learn in days. Total monthly budget: For beginners, plan to invest 25-35% of your target revenue in PPC during the first 60-90 days. Yes, that's aggressive. No, you won't sustain that ratio forever. The early phase is about buying data and building rank. You're investing, not spending.

What Does ACoS Actually Mean on Amazon?

ACoS = Advertising Cost of Sales. It's calculated as: (Ad Spend / Ad Revenue) x 100.

If you spend $20 on ads and generate $100 in ad-attributed sales, your ACoS is 20%.

But here's where beginners get confused: ACoS alone doesn't tell you if you're profitable. You need to know your break-even ACoS.

Break-even ACoS = your profit margin before ad spend. If your product sells for $30, costs $10 to manufacture, $8 in Amazon fees, and $2 in shipping, your pre-ad profit is $10. Your profit margin is 33%. So your break-even ACoS is 33%.

• ACoS below 33% = you're making money on every ad sale

• ACoS at 33% = you're breaking even on ad sales (but gaining organic rank)

• ACoS above 33% = you're losing money per ad sale (acceptable short-term for ranking)

TACoS (Total Advertising Cost of Sales) is the metric that actually matters long-term. TACoS = Ad Spend / Total Revenue (organic + paid). As your organic rank improves from PPC, your TACoS drops even if your ACoS stays flat. That's the flywheel working.

When Should You Scale vs Kill an Amazon PPC Campaign?

This is where most beginners either quit too early or bleed too long. Here's the decision framework:

Kill the campaign (or keyword) when:

• 20+ clicks with zero orders — the keyword doesn't convert for your product

• ACoS is 2x+ your break-even after 14 days of data — it's not going to magically improve

• The search terms generating clicks are irrelevant to your product — structural targeting problem

Scale the campaign when:

• ACoS is at or below break-even consistently over 7+ days

• A keyword has 5+ orders and strong conversion rate (10%+ is great)

• Organic rank is improving on your target keywords — the flywheel is turning

Hold and optimize when:

• ACoS is slightly above break-even but trending downward

• You're getting conversions but not enough data to make a confident call (under 30 clicks)

• The keyword is strategically important for ranking even if short-term ROAS is thin

The biggest beginner mistake is impatience. PPC needs data to optimize. If you change bids every day based on yesterday's results, you'll never reach stability. Make bid adjustments weekly, not daily. Let the data accumulate.

What Are the Most Common Amazon PPC Beginner Mistakes?

After onboarding hundreds of brands, these are the recurring mistakes:

1. Running too many campaigns at once. Start with 2-3 campaigns per product. One auto, one manual broad, one manual exact. That's it. You can add complexity later. 2. Not using negative keywords. If a search term gets 10+ clicks with zero sales, negate it immediately. Negative keywords are how you stop paying for irrelevant traffic. Check your search term report weekly. 3. Setting and forgetting. PPC is not a crockpot. You don't set it and walk away for a month. Weekly optimization is the minimum cadence. Review search terms, adjust bids, add negatives. 4. Panic-adjusting bids daily. The opposite of set-and-forget. Amazon's algorithm needs 3-7 days to stabilize after a bid change. Changing bids every day means you never get clean data. 5. Ignoring the listing. No amount of PPC spend fixes a bad listing. If your main image is weak, your title is stuffed with irrelevant keywords, or your reviews are under 3.5 stars, PPC will just send expensive traffic to a page that doesn't convert. Fix the listing first. 6. Targeting only high-volume keywords. Beginners want to rank for the biggest keywords in their category. Those keywords cost $3-$5 per click and you're competing against sellers with 10,000+ reviews. Start with mid-tail and long-tail keywords where you can actually win.

How to Allocate Your Amazon PPC Budget as a Beginner

Here's a simple budget allocation framework for your first 90 days:

Month 1 — Discovery Phase (aggressive spend)

• 40% auto campaigns (keyword discovery)

• 30% broad match manual (wider net)

• 30% exact match manual (your best 5-10 keywords)

• Target ACoS: don't worry about it. Seriously. You're buying data.

Month 2 — Optimization Phase

• 25% auto campaigns (still discovering, but you've negated losers)

• 25% broad match (tightened up with negatives)

• 50% exact match (your proven keywords get more budget)

• Target ACoS: aim for break-even or slightly above

Month 3 — Scaling Phase

• 15% auto campaigns (maintenance discovery)

• 20% broad match

• 65% exact match (double down on winners)

• Target ACoS: at or below break-even, TACoS trending down

The shift is simple: as you learn what works, move budget from research to exploitation. Your autos never stop entirely because new keyword opportunities always exist. But the majority of your spend should flow toward proven, converting keywords.

If you're past the beginner phase and doing $50K+/month but still running PPC like a beginner, that's a different problem — and it's costing you more than you think. We specialize in taking brands from "it's kind of working" to systematically profitable.

Book a free strategy call: https://calendly.com/d/crft-5qs-x9w

Hunter Harris is the founder of GigaBrands, an AI-assisted Amazon growth agency managing 50+ brands with over $205M in total Amazon sales.