How Amazon Advertising Actually Works (And How Not to Light Your Money on Fire)
The first time I ran Amazon ads, I thought I was doing everything right.
I picked a few keywords, set a budget, turned the ads on… and waited.
A couple days later, Amazon had happily spent my money and I had almost nothing to show for it. No sales. No clear answers. Just that sinking feeling of “okay, I definitely did something wrong.”
If you’ve ever felt that way, you’re not dumb. Amazon advertising is simple on the surface and quietly dangerous underneath.
This post isn’t about tricks or hacks. It’s about understanding what Amazon ads are actually doing, how to choose keywords that get clicks without draining your budget, and how to tell — clearly — whether you’re making money or just feeding the algorithm.
First: What Amazon Ads Really Are (And What They’re Not)
Amazon ads are not like Facebook ads.
You’re not convincing someone they want something.
You’re showing up when someone is already shopping.
That’s huge.
Every keyword you bid on is basically you saying:
“If someone types this, I want a chance to be seen.”
That’s it.
If you remember nothing else from this article, remember this:
Amazon ads amplify what’s already working. They don’t fix broken products or bad listings.
If your product doesn’t convert organically, ads won’t save it. They’ll just help it fail faster.
The Keyword Mistake Almost Everyone Makes
Most beginners think the goal is to get as many clicks as possible.
It’s not.
Clicks are easy to buy. Profitable clicks are not.
When you choose keywords, you’re not asking:
“Will people click this?”
You’re asking:
“Will the right people click this and actually buy?”
There’s a massive difference.
How I Think About Keywords (Very Simply)
I mentally split keywords into three buckets:
1. Buying Keywords
These are specific and boring — and that’s good.
Examples:
“grass-fed beef tallow for skin”
“dog paw balm for cracked paws”
“ceramic coating spray for cars”
These people are not browsing. They’re shopping.
These keywords usually:
Cost more per click
Convert better
Waste less money long-term
This is where most of your budget should eventually live.
2. Research Keywords
These are mid-level. Still useful, but riskier.
Examples:
“beef tallow moisturizer”
“dog paw balm”
“ceramic coating”
These can work, but only if your listing is strong and clear.
Early on, these keywords can help you learn what shoppers respond to — but they can also bleed money if you’re not careful.
3. Curiosity Keywords (Where Money Goes to Die)
These sound nice but usually don’t convert.
Examples:
“natural skincare”
“dog products”
“car detailing supplies”
These are expensive lessons disguised as opportunity.
Clicks happen. Sales usually don’t.
Why Amazon’s Suggested Keywords Can Be a Trap
Amazon will happily suggest keywords for you.
That doesn’t mean they’re good for your product.
Amazon’s job is to get clicks.
Your job is to get profit.
Those goals overlap… but not always.
When you’re starting, it’s better to:
Bid on fewer keywords
Understand each one
Know why it’s there
Not just dump in 200 suggestions and hope for the best.
How Much Should You Spend on Ads? (The Honest Answer)
People hate this answer, but here it is:
You should spend what you’re willing to lose while learning.
Early ads are data, not profit.
That said, you still need guardrails.
A simple starting framework that works for most products:
Daily budget: $10–$30
Start with 5–10 keywords
Run ads long enough to get real data (not just one day)
If $20/day stresses you out, lower it. Stress makes people turn ads off too early.
The Metric That Actually Matters (Not the One Everyone Talks About)
Everyone obsesses over ACoS.
ACoS matters… but context matters more.
Instead, ask:
“How much does it cost me to get a sale?”
If your product:
Sells for $30
Costs you $12 landed
Leaves you $18 before ads
Then:
A $6 ad cost is fine
A $12 ad cost is dangerous
A $15 ad cost is a problem
ACoS percentages are meaningless if you don’t know your actual margin.
Know your numbers. Always.
How to Tell If a Keyword Is Losing You Money
Here’s a very unglamorous rule I follow:
If a keyword:
Has spent 2–3x your product price
Has zero sales
Pause it.
You don’t need to be emotional about it. You’re not “giving up.” You’re managing capital.
You can always revisit it later.
Amazon ads reward patience, not stubbornness.
The Click-to-Sale Reality Check
This is something I wish someone had explained to me earlier.
Not every click is supposed to convert.
But if you’re getting:
20+ clicks
No sales
That’s a signal.
It usually means one of three things:
Your keyword intent is off
Your main image isn’t clear
Your price doesn’t make sense
Ads don’t exist in isolation. They expose problems elsewhere.
Why Cheap Clicks Can Be the Most Expensive
This sounds backwards, but it’s true.
A $0.30 click that never converts is worse than a $1.20 click that does.
Early on, I wasted more money chasing “cheap traffic” than I ever did bidding up on real buying keywords.
Cheap clicks make dashboards look good.
They don’t build businesses.
When Ads Start Working (And It Feels Boring)
Here’s the honest moment ads start working:
When you stop checking them every hour.
When you’re making small, boring adjustments.
Lowering bids
Pausing losers
Feeding winners a little more budget
No fireworks. No magic switch.
Just steady improvement.
That’s when you know you’re doing it right.
The One Thing I’d Tell Every New Seller
If advertising feels confusing, it’s not because you’re bad at it.
It’s because you’re trying to make decisions before you have enough information.
Slow down.
Spend intentionally.
Let the data mature.
Amazon ads aren’t about being aggressive. They’re about being deliberate.
Final Thought (The Part No One Likes Hearing)
You will lose some money on ads.
Everyone does.
The goal isn’t to avoid losses completely.
The goal is to lose small while you learn, then let the system work once it makes sense.
The sellers who survive aren’t the ones with the best strategies.
They’re the ones who understand why their ads are doing what they’re doing.
That’s when advertising stops feeling like gambling and starts feeling like a tool.