The Ultimate Guide to Amazon PPC Strategies: Boosting Sales with ACOS and TACOS with Expert Elizabeth Greene

Episode 189

Welcome everyone to the FiringTheMan Podcast.  On today’s episode, we are joined by Elizabeth Greene, the co-founder of Junglr.com which is an agency that helps Amazon sellers with all things Amazon Ads and the ecosystem surrounding an amazon account which contributes to the success of your Ads goals.  We were referred to Elizabeth by our friends over at “Two Sellers and a Microphone” where Kris Gramlich sent me a one sentence email saying – “Elizabeth was a guest on our show recently, and she brought the fire!”

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00;00;00;01 – 00;00;09;07
Speaker 1
Welcome everyone to the Firing the Men podcast, a story for anyone who wants to be their own boss. If you sit in a cubicle every day and know you are capable.

00;00;09;07 – 00;00;09;23
Speaker 2
Of more.

00;00;09;24 – 00;00;24;00
Speaker 1
Then join us. This show will help you build a business and grow your passive income stream in just a few short hours per day. And now your host serial entrepreneur is David Shoma and Ken Wilson.

00;00;24;02 – 00;00;53;10
Speaker 3
Welcome, everyone, to the Firing the Man podcast. On today’s episode, we are joined by Elizabeth Green, the co-founder of Jungler Tor.com, which is an agency that helps Amazon sellers with all things Amazon ads and the ecosystem surrounding an Amazon account which contributes to the success of your ad goals. We were referred to Elizabeth by her friends over at two sellers and a microphone where Chris Gramlich sent me a one sentence email saying Elizabeth was a guest on our show recently and she brought the fire.

00;00;53;11 – 00;00;56;19
Speaker 3
We are very excited to have Elizabeth join our show. Welcome, Elizabeth.

00;00;56;21 – 00;01;01;08
Speaker 1
Thanks. Thanks for having me. I guess I got to I got to bring it this time then and got to live up to the reputation.

00;01;01;14 – 00;01;11;25
Speaker 3
Absolutely. So for those who have not heard you on a podcast, can you share a little bit with our listeners about your background and your path to becoming a co-founder at Jungler?

00;01;11;26 – 00;01;28;17
Speaker 1
My path is kind of interesting. It’s maybe a little bit different. So I know you all are big into, you know, firing the man and quitting the day job. I did quit a job to do this. However, my day job was a stay at home mom. So my father, the man, it was my family. Not essentially like beer sell or so it was good gut or soul type.

00;01;28;18 – 00;01;49;27
Speaker 1
But yeah, so my path really was trying to figure out a way to bring the family home, which of course, is what you all are doing in firing men like having family home together, being able to do something for yourself on your own terms. So it was definitely from wanting to do that, which of course, like a lot of other people and your listeners led us to the world of Amazon.

00;01;49;28 – 00;02;11;01
Speaker 1
So I like to say like until you like, pierced through the curtain and recognized that there’s something behind the Amazon.com and there’s this entire ecosystem. It’s really fascinating. So we got into that, which then of course led us to Amazon and which led us to what we’re doing today. So we definitely focus on partnering with sellers who are looking for really that sales growth acceleration.

00;02;11;01 – 00;02;16;24
Speaker 1
And we do that through like really crafting custom strategies and ads, which I’m super, super stoked to get into today.

00;02;16;26 – 00;02;38;26
Speaker 2
Excellent. Well, thanks for sharing that, Elizabeth. I’m excited to get into it, too. So first question we have is, you know, one thing that’s constant e-commerce and online businesses is that is change changes like always here. Right. It’s omnipresent. And so in 2023, can you share a little bit about what’s what’s working in Amazon advertising and 2023 and what’s changed.

00;02;38;27 – 00;03;04;13
Speaker 1
Yeah. Yeah. So a lot of things are still working. I think a lot of the foundation has not been completely shaken, although there’s some very recent updates. So what they’re doing, they’re matched, I thought to get like insanely technical, but there are some updates that Amazon has recently rolled on out that kind of throws, unfortunately, a wrench in the works of a lot of our current strategies and kind of changes are things that have been O.G. for a while.

00;03;04;14 – 00;03;26;25
Speaker 1
So that definitely when you talk about change keeps us on our toes. But still I think there’s a lot of things very common, which is probably going to be comforting to your listeners. The fact that they’ll most of the accounts, even though Amazon is actually building out like sponsor brands and display ads, months of product, as are still going to make up the bulk of a lot of accounts today, I don’t really see that changing just due to that ad type.

00;03;26;26 – 00;03;44;11
Speaker 1
I’m still focusing in on your ideal target market, meaning recognizing keywords that were very well to your customers and making sure that your odds are served up there. That is always going to be a good strategy because that is like core to good advertising is like get in front of your target audience. So that’s always going to be there.

00;03;44;11 – 00;04;15;29
Speaker 1
I see the things that are definitely rapidly changing is one just kind of Amazon continuously rolling out updates changes to their Amazon platform and then them constantly rolling out updates and changes to their search pages. It seems like there’s always some new widget or section that’s popping up on the search pages, which on fortunately what that has done is really push down a lot of the organic placements, which there used to be, you know, quite a few of them, what they consider like top of fold before you start scrolling.

00;04;15;29 – 00;04;39;24
Speaker 1
Now you’re lucky if there’s one, which is definitely like kind of increased the competition, which means that, you know, you’re paying higher for cost per click because one, there’s just more sellers on the platform. Everybody like there’s still room to grow and sell on Amazon. So there’s I don’t see it going away anytime soon. And there’s still immense opportunities for those that want to like, reach out and grab them.

00;04;40;01 – 00;04;48;20
Speaker 1
So it’s on it. This the market’s gotten so saturated, it’s just gotten more competitive. And so playing a more sophisticated game has become more important.

00;04;48;22 – 00;05;05;02
Speaker 2
Absolutely. So, one, I have 12 questions. One for for all the PPC geniuses listening to this, can you just briefly touch on you had mentioned it was the match types that were that Amazon is like kind of tweaking. Can you just maybe briefly go over it? Not, not super far in the weeds, but just enough.

00;05;05;02 – 00;05;31;15
Speaker 1
So for anyone listening who really likes to dig into the nitty gritty of stuff, if you are familiar with the way that broad match in sponsor and brand function, so for your audience is not quite aware broad. Matt Traditionally and sponsored product guides like say I’m advertising the word like running shoes right? Those were two root words were running in shoes must be present in whatever shopper search.

00;05;31;15 – 00;05;51;24
Speaker 1
Somebody types in a random long thing. It has to have the word running. It has to have the word shoes. This was not the case in sponsored brand. Amazon had always functioned like this with broad match to say, We’re going to serve you up to all the related terms. So I use running shoes because it’s similar in the term on, say, sneakers right there.

00;05;51;24 – 00;06;08;28
Speaker 1
They’re somewhat related, right? Someone who’s shopping, running shoes might be looking for sneakers and then vice versa. So Amazon and say, okay, we’re going to show your ad to these shoppers as well. So the way that they go about kind of selling this to us, I guess you would say, is like, oh, look at all of these new additional shoppers that you get to get in front of.

00;06;08;28 – 00;06;27;27
Speaker 1
Like, this is great. It’s exposure. It is great, except for when you start showing in a bunch of terms that don’t relate as well to your product. Or maybe those particular shoppers don’t resonate as much with your offer and so you can end up getting, you know, like inefficient ads that way. That was the way it used to function in sponsor brand ads.

00;06;27;27 – 00;06;50;07
Speaker 1
They have now carried that over to. That is now the way that sponsored product broad match function, which as I said, sponsor product that dog everybody runs. And unfortunately with the update, there was no notifications from Amazon were part of the Amazon partner program. They didn’t do a webinar and this they didn’t let us know. They didn’t put it anywhere.

00;06;50;08 – 00;07;19;29
Speaker 1
What happened is because I have a bunch of she friend, well, we’re like, What the heck is going on with our search term? Reports Like, this is not supposed to be here because we know what it’s supposed to look like. And we all reached out to our Amazon reps and like if you are on LinkedIn, I think I want to say this is like three or four months ago, like leaving that spot and everybody was freaking out and nobody knew what was going on because Amazon didn’t send any updates and nobody was telling us what was going on except for if you now go look at Amazon and their the literature that they now have

00;07;19;29 – 00;07;43;24
Speaker 1
on their site, which explains how the match types work, they just quietly changed their naming on there. And so we’re like, Oh, okay, so now it’s official because they quietly changed that. So unless you were like knee deep in your search term imports, you would have no idea that this is how it works. And they recently did the same thing to sponsored brands, exact match tapes, and now it can also pull loosely relevant terms against strictly for a sponsored brand.

00;07;43;24 – 00;07;51;06
Speaker 1
But it never functioned like that before. And again, nothing except for something weird in the search and reports and a very quiet update to their what.

00;07;51;07 – 00;08;14;00
Speaker 2
Page that’s yeah that’s interesting That’s like pushed it out on the sly and then kind of covered up for it. Covered up for it. Another follow up question is something that Dave and I’ve talked about quite a bit is Amazon. It seems like in the last 12 months, maybe 18 months, they’re adding your you alluded to it earlier, Liz, but they’re adding more and more ad spots on page nine, you know, anywhere, anywhere on Amazon.

00;08;14;00 – 00;08;34;02
Speaker 2
And so this this does two things in my mind. One is it it forces more pay to play more. You know, you have to have about good advertising to sell your products into keyword ranking. It makes keyword ranking less relevant because your ad spots are going to be taken up. You know, unless you’re in the top 5 to 7 spots in a keyword, you’re going to be on page three.

00;08;34;02 – 00;08;51;20
Speaker 2
And so it makes that less relevant. What do you see? And also, I think at the core of it, Amazon is there to make money, right? In ad revenue is very easy money for them because there’s not a lot of there’s not a lot of legwork. And so what do you see? What do you foresee if you have a crystal ball, what does it look like in the next 18 months that they continue down this road?

00;08;51;23 – 00;08;54;06
Speaker 2
Do they do they halt at some point, you think?

00;08;54;08 – 00;09;15;16
Speaker 1
Yeah, that’s interesting. I would say. I mean, at some level they can’t completely go all the way. Like I can’t imagine the absolute uproar if the entire page one was simply ad. Also, it doesn’t always create a very good shopper experience. So they will always take that into account, I think at least. And there are some you would see sort of hedges against.

00;09;15;16 – 00;09;33;17
Speaker 1
And so, for instance, if you are trying to go on advertise soft, try and see if you can show up for the keyword running shoes, it’s near impossible. I can guarantee you the bid you would probably have to put on there to show up anywhere near is probably close to like $40. And I’m not even being like ridiculous in that.

00;09;33;17 – 00;09;53;21
Speaker 1
So there are certain things that they’ve tried to put in place. So like even if it becomes very saturated with ads, you’re still on some level trying to serve up relevant ads to shoppers. So I do know that those kind of things are in place. What I’ve seen that it looks like to the end consumer are not the consumer, but the end seller is just one.

00;09;53;21 – 00;10;19;13
Speaker 1
I need to run much more sophisticated because with it being much more competitive and the necessary like the home is kind of the necessary evil to run just a whole bunch more ads because that’s how you’re going to get those organic placement or any placements at all. You really have to be much more intentional. It’s no longer like just throw up a bunch of stuff and let’s see what sticks and then go pause everything else and you know, just kind of wash it out.

00;10;19;13 – 00;10;35;13
Speaker 1
Now you still can end up with a kind of an interesting strategy at the end of that. But the wasted ad spend along the way, depending on how good your cash flow is, may put you out of business. So it’s it’s really important to be able to do that. I mean, what what it ends up like in looks like ultimately.

00;10;35;13 – 00;10;52;26
Speaker 1
I mean, I kind of see where they’re trying to push with Amazon and at least from what they’re saying. So they’re talking about a bunch of awareness plays and they’re also like with this changes to these match type that’s kind of what they’re saying. It’s like, Oh, look, look how much more awareness that you’re able to spread for your product.

00;10;52;26 – 00;11;07;13
Speaker 1
However, the typical brand owner is very r y conscious and still very profit conscious. So how that ends up in the middle and what Amazon sellers are kind of willing to stomach, well, we’ll kind of see.

00;11;07;13 – 00;11;12;13
Speaker 2
Yeah, I don’t think awareness pays the bills for sellers. David, over to you.

00;11;12;13 – 00;11;31;16
Speaker 3
Absolutely. So if I look at the path of most Amazon sellers, typically when they first start out, they’re going to try to self-manage PPC. I did can did. It’s kind of the path as you get further along with it, I would say there’s a hundred sellers, maybe 90 of them. This would be one of the first things that they outsource.

00;11;31;21 – 00;11;57;10
Speaker 3
And so now instead of managing the day to day, like adjusting bids, running, search term reports, they are now managing a PPC manager, whether that be a agency or somebody that they bring in-house. So with that in mind, what are some metrics when somebody is managing a PPC manager that they should be looking at every week with the goal of profitability and cash flow and having a good business overall?

00;11;57;12 – 00;12;26;11
Speaker 1
That’s a great question and I would definitely and this is how we like to look at it. I like to look at it through the lens of sales growth. So are we seeing sales growth? Right? Are what are what are sales look like now? You definitely should be looking at net profits as well. However, I want to caution anyone out there who just started to look at their net profits and then try and backtrack that into ads, make sure you fully understand all of your costs and fees that go into Amazon advertising.

00;12;26;11 – 00;12;42;09
Speaker 1
So, for instance, I’ve had conversations with sellers and they’re like, Oh my goodness, I’m so profitable. It’s the ads, the ads, And then you’ll do the calculations on what their cost of goods are taking up or you just did a huge removal order this month and so you had an extra a couple thousand dollars on your balance sheet.

00;12;42;09 – 00;13;01;20
Speaker 1
That’s not the ad. And it’s not that I don’t want anyone to be profitable. I’m just I want to caution people about having knee jerk reactions to turning off ads when that’s not necessarily where maybe the bleeding in your props is coming from. You also want to be looking at total cost. The total cost is a really good profitability metrics.

00;13;01;20 – 00;13;24;27
Speaker 1
It tells you how much, how your ads relate to in the entire account, what percentage of your total sales are being attributed to ads. And that one thing that we like to look at for that is I call it ad efficiency. So we like to look at total costs. It costs as well. And then what I call ad sale percentage or essentially like what percentage of my total sales are being driven through ads.

00;13;25;03 – 00;13;37;27
Speaker 1
And with those three numbers plus looking at sales growth, you can get a really good perspective on, okay, so am I seeing, you know, top line growth? And then looking at the other metrics to see like kind of your ad efficiencies.

00;13;37;27 – 00;13;54;12
Speaker 3
One follow up question there is on the sales growth, say that plateaus maybe say you’ve been running your brand for two or three or four years. You feel like you’ve taken PPC as far as you can in terms of the number of keywords in everything else. What then like what should you focus on that?

00;13;54;14 – 00;14;19;02
Speaker 1
This is a great question. So I actually have dubbed it it’s, it’s super clickbait. Sorry, but I thought that the Amazon growth equation so was essentially like because we will get this question all the time, what happened to my results? Right? So sales went up, sales went down, what happened. And so a lot of these equations are ways that I’ve kind of crafted or frameworks for looking at accounts have been through me trying to figure out these quick questions.

00;14;19;02 – 00;14;36;00
Speaker 1
Right? Because if like sales go down, people are like, okay, have you checked the reviews? Have you checked your keyword search volume, sales trends like where you ranking maybe your competitors are running coupons like these, all these things that can happen and are external that impact your sales. Or it could just be that like maybe your conversion rates are down.

00;14;36;00 – 00;15;01;24
Speaker 1
You’re like, we were there, how do I compare? And so I came up with a way that you can literally track your trends in three different numbers and you can identify where the sales growth or dip is coming from. And then that allows you to go further down and troubleshoot on to the three. The sales or the Amazon growth equation is essentially you can calculate your sales if you take your and multiply that times your conversion rate and multiply that times your average order value.

00;15;01;24 – 00;15;17;10
Speaker 1
So it’s essentially how much traffic is coming into the listing, what is the conversion rate on that traffic? And when I make a conversion and how much do I make? And when I say average order value, it’s because it might be slightly different than sale price, because that would account for multiple purchases, which is why you have to calculate it that way.

00;15;17;12 – 00;15;36;05
Speaker 1
So if you’re trying to figure out why is my gross stagnant, is it like is my market growing meaning session? So am I getting more traffic, but maybe less of that traffic is converting? Have I had to go down on my average order value price? Have I had to drop my pricing to keep up with market? But my conversion rate and my sessions have stayed the same.

00;15;36;05 – 00;15;58;27
Speaker 1
So if you look at it from like this kind of like three prong perspective, you can kind of try and get an idea. And the other way that we look at it is I look at accounts as pieces of a whole. So I really like to look at top line account, meaning like overall, so what’s my average, you know, for the entire account, What’s my total cost, what’s my costs, what’s my odds, percentages, what is my sales growth look like?

00;15;58;27 – 00;16;20;19
Speaker 1
But in reality, those numbers at the account level are driven by individual products. If you’ve been selling for a while, hopefully you have more than one product. So then the question is you’re but then you added in a whole bunch of catalog complexities, right? So that’s most of the time when we get sellers coming to us is they say like, okay, I’ve, I’ve built myself up like ten different products.

00;16;20;19 – 00;16;36;24
Speaker 1
I’ve got like, like you said, I’m downloading. You searched our reports and I’m like, I’m launching all of these campaigns or I’m doing my bid adjustments or I’m doing all of the things on my checklist that I’m supposed to be doing to manage my ads. But like, I’m looking at my sales growth and I’m going like, what’s it like doing all these things?

00;16;36;24 – 00;16;56;11
Speaker 1
Advertising ranking, not translating the sales growth? So what we’ve started doing is kind of taking a top down approach and really looking at the account. So if you’re gauging growth, we look at an overall perspective. But if we’re trying to figure out like where the heck do we grow this account, you don’t actually grow an account, you grow the product.

00;16;56;11 – 00;17;14;29
Speaker 1
So the question is not how do I grow my account? The question is which product do I need to work on to grow? What I do is we look at this from pieces of a whole meaning. What impact does each product have on the total account from a total sales and from an ad spend perspective? So it’s actually really easy.

00;17;14;29 – 00;17;35;22
Speaker 1
Most people look at their business reports, everyone knows their best seller. Oh, this product is absolutely crushing it for me. This is my best seller. But the thing that a lot of people don’t know is what are the ad efficiencies on my best seller? So most times when someone sees a growth dip or they’re trying to figure out how do I get my sales, what they’ll do is they’ll look at my top product, okay, I just need to push my top product more like how do we get the thing moving more so they’ll throw more ads on it.

00;17;35;22 – 00;17;51;07
Speaker 1
Oftentimes what this does is it makes the account much less profitable because you keep throwing out. So what you want to do is look at it from a percentages of total or the new favorite thing because it gives you pieces of the pie. So like how big of a piece of the pie is each of these individual products?

00;17;51;07 – 00;18;05;04
Speaker 1
So it’s really easy to pick a business report, sort top down, but oftentimes you’ll have like numbers. And sometimes when you’re trying to gauge the difference between the numbers, you’re like, okay, this one’s obviously much bigger, and then you’ve got a couple more and then like this one, but you don’t really know how big of a piece of the pie is it?

00;18;05;04 – 00;18;20;11
Speaker 1
So all you have to do is you take the sales for that one product, divide it by the sum total of sales for all the products, and then you have your pieces of the pie. So you can say, okay, and so this product’s making up 40% of my total sales. 34 24%. Okay, So these are my heavy hitters.

00;18;20;11 – 00;18;37;20
Speaker 1
But then what you want to do is you want to get the again, percentages of total. You want to look at the ad spend for all of these products. So I would say exact same thing, ad spend for this product divided by sum total of the ad spend. And then sometimes what you will find is that a particular product I actually we ordered it in an account.

00;18;37;20 – 00;19;00;25
Speaker 1
One of the products was making up 15% of the total sales and they had allocated 24% of their total ad spend to this product. And so they’ve they’ve continuously allocated ad spend, ad spend, ad spend, and the products are growing. I could just be that it’s a market thing. Maybe they need to get a better market fit. But what you can do actually, if you talk this over time, you could say like I’m throwing ad dollars at it and the total percentage is not moving.

00;19;00;25 – 00;19;21;25
Speaker 1
I’m not getting the bigger pie, I’m just getting less profit on this one slice. So now that you kind of have your perspective pieces of a whole, then you can look at your ad efficiency. So what I would do is I would say, okay, so this is my top seller, biggest piece of the Pie. Maybe it probably has my biggest piece of spend, but what is the ad efficiencies, meaning a cost total across ad cell percentage.

00;19;21;25 – 00;19;45;04
Speaker 1
So if my biggest piece of the pie has less ad efficiencies, meaning I have a higher than my average account, total cost on this and I’m seeing that ad sales percentage. So I thought I’d sell percentage. I think you all referred to it as a percentage of organic like PPC sales. How I calculate it is I take the ad sales divided by total sales, what percentage of my total sales come from that section.

00;19;45;04 – 00;20;09;10
Speaker 1
So if I have a higher total cost and I’m seeing that ad sale percentage creep up past 50% and my cost is a little bit high, even though it’s my best seller does me throwing ad dollars out, it makes a lot of sense. Like in this case, no, because I’m simply going to be driving it more unprofitable. I probably should look at refining my odds here, even though I’m saying, Hey, I need sales growth and this is my best seller.

00;20;09;11 – 00;20;32;07
Speaker 1
That’s what everyone wants to go to. So I would say, where can I find a bigger, you know, a big slice of the pie? It’s bigger than like 5%, 1% of my total sales. Can I find like, you know, 20, 30%, maybe even a 15%. But then when I look at the ad efficiencies, meaning my total costs highly profitable, my ad cell percentage, I’m like below, you know, maybe I’m below 50, maybe I’m like 35.

00;20;32;08 – 00;20;44;26
Speaker 1
There’s room to push this product. Then that makes sense for me to then go say, where can I grow this piece of the pie, to grow the entire pie because I want to be super profitable on it. I’m already super efficient. So there’s probably more for me to dig up here.

00;20;44;26 – 00;21;05;29
Speaker 2
I think that was dynamite. And I think anybody that has more than five products in your catalog right now, you should rewind this and listen to it again and to and write down everything Elizabeth just said and go execute that. That was excellent. Next question. We’re getting like really down in the weeds I think is great. And so this next question is organic versus versus PPC.

00;21;05;29 – 00;21;33;14
Speaker 2
And so this is something that, you know, David and I are a bunch of masterminds were in a bunch of groups. This is hot top profitability, hot topic right now, right? And so across our portfolio of brands, we we’re in that between 40% and 60% swing on organic and paid advertising sales in that in there. Now what have you seen with your experience on where where is is there like a sweet spot for profitability and for healthy functioning of, of a core Amazon FBA business?

00;21;33;14 – 00;22;02;02
Speaker 1
Yeah, well that’s a really good question. So I would say you’re probably swinging within the average at this point. I remember I want to say it was only two years ago the General Convention used to be if you got anywhere over 30% of your total sales coming from and you were wildly inefficient and then there was some issues and like you said, that was before all of the ads moved into the page one and where, you know, all of a sudden all the necessity came for adding up.

00;22;02;06 – 00;22;26;12
Speaker 1
So these days I’m seeing closer to a 5050 split, probably on average. Now, if you’re getting more aggressive, you might be leaning closer to a 60%. So the one thing that we do is we will keep a gauge on these like it’s a it’s a metric that we religiously track for all of our brands. And that was literally in like my breakdown when I was saying, look at ad efficiency, because if you’re like, Oh, totally, cost is great, really great.

00;22;26;12 – 00;22;47;20
Speaker 1
I’m going to 80% of my total sales is coming from AD, So maybe it’s not that maybe ads are propping up the brand growth and if that at that point if you’re profitable, you might just say like, hey, this is the way the product functions. So I would be careful in making too much of the kneejerk reaction off of that sell percentage or like the ratio of organic to ads if everything else is working.

00;22;47;20 – 00;23;05;28
Speaker 1
I’m not saying work don’t work to fix it. I’m just saying I’ve seen this before where someone say like, Oh, you know, this number is bad. So they’ll go and turn it off and like screw up their entire like sales trajectory because they were focusing on only one number. So is it definitely a metric to track, unfortunately, the way that you fix it.

00;23;05;28 – 00;23;24;09
Speaker 1
So there’s there’s two scenarios. One scenario is where you’re running very, very aggressive ads you have or good organic rankings, but your ads are kind of like eating up a very big piece of the pie. If that is the case, then if you pull back on the ads and you’re able to maintain your organic ranking, then you can make this number much better and like you’re not spending as much an ad.

00;23;24;09 – 00;23;46;05
Speaker 1
So like everything’s when the problem is when it’s the second scenario, when you are not ranking all organically and you also have a heavy on sale percentage. In that case, if you pull back on ads, that’s actually what’s driving and propping up your sales. So therefore you’re going to lose out on or on your total sales. And that creates an obvious problem.

00;23;46;05 – 00;24;00;18
Speaker 1
And you can end in like when I call like the death spiral and you’re just seeing like month over month, like sales percentages go down and it’s it’s horrifying. And you kind of have to correct for that. And sometimes that craft is very painful and worse off than when you started. So I don’t want to tell horror stories.

00;24;00;18 – 00;24;24;20
Speaker 1
I’m just saying the thing that I found with managing ads well and the current things I’m coaching my team through are not even necessarily like bid or budget adjustment or keyword selection, although those things are very important. It’s one understanding the analytics and to understanding how the analytics relate to each other. And I think if you can figure that out, that’s going to lead you to the right ad strategy.

00;24;24;21 – 00;24;39;26
Speaker 2
Yeah, absolutely. One last follow up on that. What have you seen that works to in terms of the organic? Obviously, we want more organic, right? The organic sales are what drives profitability. And so what are some ways to increase organic?

00;24;39;29 – 00;25;04;08
Speaker 1
You increase organic sales through better ranking, which those ranking campaigns are very simple. You put an exact MAPS campaign primarily, mostly sponsor product, potentially sponsor brands, video ad maybe, but I would say primarily sponsor product primarily and exact match very high bids to that top of search placement. And you just go for the sales velocity. The reason why is and most times I get questions on how do you build out a ranking campaign?

00;25;04;08 – 00;25;23;03
Speaker 1
And the question that’s actually being asked, because I’ve said this on multiple podcasts, I’m like, that’s how you build a ranking company. You want. If you want to go well on the ranking. Having said that today, everyone does it. And then they look at the A cost that results from that and they look at the ad spend that results from it and they come back and ask me how do I build out a ranking campaign?

00;25;23;03 – 00;25;44;26
Speaker 1
And my answer is you don’t want you’re thinking the question you’re asking is not how do I build a ranking company? And the question is how do I make this keyword profitable, which unfortunately is a matter of your conversion rate and how much the market is willing to pay. Unfortunately, sometimes you sellers will get into a market and you’re like, I can’t believe somebody is going to pay $5 cost per click for top of search.

00;25;44;26 – 00;26;07;14
Speaker 1
I’m like, Well, your competitors are paying it, and if your competitors are paying it, Amazon’s perfectly happy to take their money. So what I find is that it’s more a matter of picking the right keywords and picking keywords that you convert on and ones that you actually can gain enough sales velocity on without losing your shirt too much, that it’s actually worth it for you to do it in the long run.

00;26;07;16 – 00;26;30;21
Speaker 1
Now, depending on again, your cash flow and you know, kind of how big your how much you can afford at this point will really determine what that looks like for you and sometimes new sellers who aren’t going in eyes wide open, they’re a little bit dissatisfied with what the answer to that question is. And that doesn’t mean there’s not still a way to play the game.

00;26;30;22 – 00;26;47;17
Speaker 1
There’s definitely a way to still play the game, but you’re going to have to play a much more sophisticated game and it’s going to have to be much more of a long term play. You won’t have the pockets to go in, you know, like someone like Naftali or Simple Modern or someone has to be able to come in and just like, absolutely blow.

00;26;47;17 – 00;26;51;18
Speaker 2
Something up for awareness, at least the awareness. David, over to you.

00;26;51;24 – 00;27;06;20
Speaker 3
All right. What has been your experience with Amazon ads outside of the U.S. marketplace? Are there any that seem to be more competitive or less competitive? It’s just something that we’ve been talking a lot about internally as we launch new products.

00;27;06;20 – 00;27;31;05
Speaker 1
Yeah, that’s a good question. It is highly dependent on the category. I will say doing market this event keyword research is insanely important. You want to go through the process of doing keyword research for each individual market exactly the same as you would for any other market out there. So I say we do have some sellers that like, you know, Canada absolutely crushes at Mexico, absolutely crushes it, and the cost per clicks are much lower.

00;27;31;05 – 00;27;53;19
Speaker 1
So you will end up with that. You might also end up with certain marketplaces like France and the Netherlands. We had a conversation with some of the other like agency owners and some of like in the Netherlands broken like did our ads actually running? Because I have like no impressions whatsoever that super normal because the marketplace is very small and a lot of people in the Netherlands like don’t shop on Amazon, they’re specific.

00;27;53;19 – 00;28;18;28
Speaker 1
They go to like the other marketplaces to shop. So you will have certain cases like that. I would say typically speaking in volume, you really can’t you can’t match Amazon. You see. That being said, there are certain sub pockets where things just absolutely work. And that’s not to say that you can’t build million dollar companies strictly in EU or UK markets like I’ve talked to them are running them.

00;28;19;05 – 00;28;19;25
Speaker 1
It just depends.

00;28;19;25 – 00;28;32;07
Speaker 2
Great conversation I want to get into again, profitability. Can we talk about ACOs in tacos and can you describe the like maybe give a high level definition of each, share what the listeners like, what they should be focusing on?

00;28;32;09 – 00;28;48;22
Speaker 1
Good question. Okay. So it costs in total costs. Also with a cost is the OG. It’s one that everybody focused on. And then I don’t think tacos became really talked about for maybe about 2 to 3 years ago probably. So nobody really started talking about it. But a cost is a metric that is very unique to the Amazon platform.

00;28;48;22 – 00;29;08;10
Speaker 1
It’s kind of the inverse of ROA. So if you’re familiar with ROA, then I kind of make sense to you. So the reason why Amazon specifically you can calculate a cost is because Amazon owns the sale and they own the shopper. That’s why you don’t get a metric like it calls on any other platform because those other platforms don’t own the conversion.

00;29;08;10 – 00;29;37;19
Speaker 1
So that’s a very unique and valuable thing for like running Amazon ads. Like can be very, very certain of the conversion. So with that said, then you have very certain reported sales numbers. So what it causes is it says, okay, here’s my ad spend and I’m going to divide it by my ad sales. So in since I get a percentage, which is what percentage of my total ad sales that are gained through running my ads, what percentage of that money had to be spent to acquire those is essentially what you’re asking.

00;29;37;22 – 00;30;02;20
Speaker 1
And so for a focus on a cause, oftentimes what sellers will do is they will target what’s called a break even a clause. And that sounds like, how do I calculate that? You don’t. You just what’s my profit margin? My production margin is 30%. I break even. It costs is 30%. I keep it super. To your point, with the ads getting much more competitive, it became much more difficult to have low eight cost numbers.

00;30;02;20 – 00;30;23;03
Speaker 1
I mean, we used to see screenshots. It was like 5% e cost 10% because look how amazing I am. And then it became more competitive. And honestly, that was a function of two things. One, the rise in the cost per click and then two, unfortunately higher competition which has caused a decrease in conversion rates. And so that’s actually why it costs is going up.

00;30;23;04 – 00;30;47;08
Speaker 1
So people looked for another metric. And the other thing that people realized, which is why personally, like I don’t want to discount a cost at all, like we still look at it, we still use it to manage 100%. However, tacos or total cost gives you a broader perspective of how your ads are actually driving total sales. And in will, if you have perspective, oftentimes it stops you from making poor judgment calls.

00;30;47;09 – 00;31;06;03
Speaker 1
So with total costs, similar thing, but it’s looking at how do my how does my ad spend relate to my total account sale? So you would take it you’re taking your ad spend same numerator, you’re going to divide it by the total sales in your account. So in essence is that’s okay. I’m zooming out and taking the broader perspective.

00;31;06;03 – 00;31;29;16
Speaker 1
How like what percentage of my total sales did I have to spend in my. And this one, you do not want to be equivalent to your break even or to your profit margins, because if your total cost is equivalent to your profit margins, you’ve essentially made no money and you’re simply paying Amazon for the luxury of having a business on their platform, I guess so that that’s how your total cost can relate to profit.

00;31;29;16 – 00;31;46;02
Speaker 1
So you would say, okay, I mean this is quick and dirty math, like please use profit analysis tools or you use something more sophisticated than the kind of the rough, dirty math I’m going to give you if you’re trying to figure out how profitable. So if I know, after all, Amazon fees, my shipping fees, maybe I have a three IPL.

00;31;46;02 – 00;32;21;26
Speaker 1
I’ve calculated that on average I make 30% of my, you know, 30% margins when I sell something on the then I could say, okay, so my E cost I’d spend divided by total sales is 15%, so 30 -15 is 15. So therefore again, rough 30 napkin math, please use actual profit calculators, but I have 15% margins on my account, so I’m profitable versus if I was running a total cost at 35% and then my profit margins were 30%, I’d be like, Great, I am losing 5% of my total sales, so I’m backwards.

00;32;21;26 – 00;32;27;22
Speaker 1
And so again, rough, dirty napkin math, but it gives you a kind of a pulse on how things are going.

00;32;27;23 – 00;32;43;15
Speaker 2
One follow up on that real quick, just to put some kind of like average numbers in there, what where have you seen in your experience, like a healthy tacos range? And then what is the what is the point to where you recommend to your clients to to back off of PPC spend? What is the high at the high mark?

00;32;43;23 – 00;33;04;22
Speaker 1
That’s a good question. So it will depend on your profit margin. So really it depends channel do things you profit margins and it also depends on how aggressive the brand would like to scale because as you can imagine, your as you pull back on ads sometimes that could, you know, technically pull back sales a little bit. So sometimes it’s a test and see sort of thing.

00;33;04;29 – 00;33;29;14
Speaker 1
Also, in the beginning, your total costs will be equivalent to your eight costs because all of your sales are coming from ads at that point. So that’s why that whole PPC to organic ratio we were talking about and how we talk about like how the numbers relate to numbers. That’s why that’s so important because if all of my odds are, if all of my sales are coming from AD, then my you know, again, my two numbers are club blend.

00;33;29;17 – 00;33;49;26
Speaker 1
So I need to gain, you know, some profitable sales. So I’m looking to push up that organic ranking. So as far as what we’re seeing, I would see these days again, kind of like going back to the day like three, two years ago. I don’t like if you were running over 8% of your total sales, like you’re super unprofitable.

00;33;49;26 – 00;34;09;18
Speaker 1
And that would have been right because in the platform didn’t necessitate running that large scale of that, then it was closer to 10%. And so we’re running some of our accounts, like closer to 10% these days. However, closer to a 15% is not abnormal. Now what you can get away with is actually going to be highly dependent on your conversion rate.

00;34;09;18 – 00;34;36;06
Speaker 1
So I’ve talked to some very large businesses to, for instance, simple matter, they actually did a whole has where they completely turned off that just to see if they could get away with it. And it turned out it did decrease sales. However, it also increased profit. So they kind of and they’ve since gone back to running. Currently, they run about a I think they run about a 4%, which is very abnormal strong for Amazon sellers.

00;34;36;06 – 00;35;00;08
Speaker 1
However, the two things they do that allow them to do that is one, hyperfocus on conversion, right? Like if conversion rates are not hiking it, they will cut the product because it’s not worth it to them because they are they’re looking at does our consumer like it? They also have brand recognition as well. So that helps sell. But the second thing that they do is they purposely they see it as almost reinvesting what they would have spent on ads in lowering their prices.

00;35;00;08 – 00;35;23;27
Speaker 1
So they keep very, very competitive prices, which allows them to kind of dial back on ads and run it that way. So they’re still running 4% of their business, which is like their business is massive on Amazon. So 4% seems small. It’s quite significant on spot, but they’re focused on the other things. So if you’re not going to give you competitors are not giving you competitors, give your shoppers a good price and you’re like, Oh, my listings, fine.

00;35;23;27 – 00;35;45;02
Speaker 1
It was like, you know, I had this for two years. It always worked. And he’s not like constantly trying to reinvent like, better speak to your shoppers. You’re not going to get away with being able to run low. Totally. So I would say these days it’s probably closer to 15%. Now, if you’re heading upwards, like if someone’s getting really aggressive these days, I think an upwards to a 20 makes me slightly nervous.

00;35;45;03 – 00;36;02;05
Speaker 1
If you’re cam, you know, like if if your margins can handle it and you’re like, I just want to scale this thing like I am, I’m growth focused. I have the cash flow. I want to be a big brand. I’m here for it. You can do that. You just you want to make sure to know, like what you’re getting into.

00;36;02;10 – 00;36;16;06
Speaker 1
And if you’re constantly hammering at a 20% and you’re pulling back and you’re like, sales take an absolute nosedive. And so you have to continuously push it up. You want to take a very long, hard look at your conversion rates and how your products are resonating with the market.

00;36;16;08 – 00;36;18;02
Speaker 2
I know that’s excellent over you, David.

00;36;18;09 – 00;36;20;28
Speaker 3
Right. Can you tell us a little bit more about jungler?

00;36;20;28 – 00;36;41;12
Speaker 1
So we are Amazon ad Agency, like I said, focused on helping sellers grow their sales, like I said, through custom ad strategies. So that whole like Bill, I talked about it looking percentages of total and like digging into it and like that’s how we view AD though a lot of people will say like, Oh, we need like we have to have these like everyone here has gotten an audit, right?

00;36;41;12 – 00;37;02;22
Speaker 1
They’re like, you’re missing this ad type and you’re not using these keywords. And here’s three negative keywords that you like your miss and you’re not using placement percentage. It’s like they’re looking at the ad strictly from this is how I account is well run. And we use that. We know that we’re using those checklists, but we’re not doing is saying, Hey, you need to run all of these ads for every single product.

00;37;02;22 – 00;37;24;18
Speaker 1
Every single product does not need to have a completely, insanely built out ad structure. There are some products that potential ads are like the potential sales for that product cannot support that kind of ad structure. So having just a blanket approach and like these are the campaigns we run checklist is not going to serve the account. So what we’ll do is we’ll look at it from a top down perspective.

00;37;24;18 – 00;37;47;18
Speaker 1
We’ll say, okay, what are we actually looking to achieve? What is the best ad structure that’s going to get there? So far of hyper focused on profitability, There’s certain strategies you run. If we need a more ranking, we have a more growth focused. There’s other strategies we’ll lean heavily into. And then again, looking at the products and pieces of a whole and then building out the ad strategy according to what we’re seeing in the numbers and what we’re seeing in the sales trends.

00;37;47;19 – 00;38;10;09
Speaker 1
Again, not necessarily just a good ad account looks like for that. And because we are again, we’re neighbor focused on Amazon ads like that. That’s our one shtick. That’s our game. That’s why we’re so good at it. Then we function well as a partner with someone who’s like, Hey, look, I’ve got my catalog. It’s resonating. I really want to grow this thing.

00;38;10;09 – 00;38;31;13
Speaker 1
But I’m looking at my ad account and going, I don’t have someone to drive innovation on this. And I’m not at a point yet where it makes sense for me to bring someone in because honestly, with all the change you see on platform, you have to have someone driving innovation. Now, sometimes the account owner, Big love ads and they’re like, This is my jam.

00;38;31;13 – 00;38;48;02
Speaker 1
I frickin love it. I feel like I’m super qualified. All this stuff you’re talking about, I’m just going to listen to podcasts like this and I’m going to get the strategies I implement it because I want to be, but there has to be some wants. Even if you’re like, Oh, I’m going to get a VA, I’m going to put them on my team, They’re still following your recipes.

00;38;48;05 – 00;39;05;22
Speaker 1
Somebody’s got to write the recipe. And when something changes in the match ups or when something changes in the ad platform, somebody’s got to be the one to look at it, understand how it fits into the ad structure, and then go adjust yourself. And if that’s not going to be you, then you need to have you need to find somebody who it’s going to be.

00;39;05;25 – 00;39;16;28
Speaker 1
And there are some people who are like, I don’t have someone on my team for that, or I’m just trying to build out my team right now. And I just I don’t have time. I can’t figure this out. And so those are the people that like, well, that’s what we do. So if you need.

00;39;16;28 – 00;39;20;00
Speaker 3
Help, very nice. Very nice. Over to you, Ken.

00;39;20;00 – 00;39;27;25
Speaker 2
Yeah, for sure. So, Elizabeth, we round out our show with every guest with a fire around. It’s where we put our guests through the ringer. Are you ready?

00;39;27;28 – 00;39;28;19
Speaker 1
I hope so.

00;39;28;19 – 00;39;30;14
Speaker 2
We’ll see. What is your favorite book?

00;39;30;16 – 00;39;42;14
Speaker 1
Yes. Oh, yeah. So current favorite is $100 Million Offers by Alex Mosey, who we’re looking forward to, has $100 million leads book I think I don’t remember was this founder he’s really saying that something like.

00;39;42;14 – 00;39;46;27
Speaker 2
That Very cool That one’s on my shelf I’m going to get to it soon I hope. What are your hobbies?

00;39;46;29 – 00;39;54;20
Speaker 1
Oh goodness. So my hobbies honestly are like family and work. If I did something for fun, it would probably be writing our four wheeler.

00;39;54;25 – 00;40;01;15
Speaker 2
Awesome. I like that. What is one thing that you do not miss about working for the man or the family?

00;40;01;16 – 00;40;10;23
Speaker 1
So I do like being on my own agenda. I like being able to set up a game and then try and figure out how to play it. I think that’s my most favorite thing.

00;40;10;26 – 00;40;20;11
Speaker 2
Okay, awesome. That’s a very common answer. All right. Last one. What do you think sets apart successful ecommerce entrepreneurs from those who give up, fail or never get started?

00;40;20;14 – 00;40;40;21
Speaker 1
I would have to say it is. They’re viewing everything like a talent and not giving over power to something else. Meaning that at least I specifically, I do a lot with the Amazon sellers. The Amazon sellers that I see succeed are like, Oh, conversion rates went down. Okay, what’s driving it? What can we do? What are my options?

00;40;40;21 – 00;40;56;07
Speaker 1
All right. Execute The ones that don’t do well are the ones who will look at it like, Oh, I need help troubleshooting this. And you will go in and be like, Oh, I see this, this and that. No, that can’t be it. Because like this now, that’s not it. It’s, it’s, it’s this. It’s the competitors, it’s Amazon being terrible.

00;40;56;14 – 00;41;11;10
Speaker 1
And when you when you put off the this is why it’s happening on someone else that means that there’s nothing you can do about it because it’s in someone else’s play. So if you take it on as a challenge and you rise to the challenge and you just don’t quit, those are the people I see succeeding.

00;41;11;12 – 00;41;15;07
Speaker 2
Excellent answer. I totally agree. Court David, over you to close out the show?

00;41;15;07 – 00;41;20;28
Speaker 3
Absolutely. Elizabeth If people are interested in getting in touch with you or working with jungler, what is the best way?

00;41;21;02 – 00;41;37;23
Speaker 1
Yes, So the best way is going to be going to our website jungler dot com. There should be a form at the bottom. You can if you want to submit, get on a call with us. I’d be more than happy to talk with you. One thing I start with his goals, so go over like what do you actually want to do and get out of your Amazon business and actually really fun.

00;41;37;23 – 00;41;56;05
Speaker 1
I just updated the website. If someone has a question about Amazon advertising, I’m really trying to give back to the community a lot more as much as they possibly can. So up at the top of the menu bar, you actually see, like ask an expert that will take you to a forum where you can submit a question specifically on Amazon advertising.

00;41;56;05 – 00;42;01;20
Speaker 1
And I’ve been getting some good ones and actually making full YouTube videos out of them. So if you want a question answered, awesome.

00;42;01;20 – 00;42;07;04
Speaker 3
Very nice. Will want to thank you for being a guest on the Firing the Man podcast and looking forward to staying in touch.

00;42;07;07 – 00;42;08;26
Speaker 1
Yeah, definitely. It’s been a blast.