Rip off sponsored product campaign!

#1

I have sadly had to pause my Sponsored Ad Campaign today.

My Sponsored Product campaign did well for it’s first year with my ACOS was running between 4 to 6%. 3 months ago I started getting emails saying that I had run out of ad budget early in the day. My recommended suggested bids went from around 0 - 25p a year ago to .75p - £3.60! Seller Support’s only explanation was that competition had increased. I tinkered around with things and increased my bids to around 50p, which was the max I could afford as my profit margins are fairly low and Amazon already took the same amount of profit as I made per sale. The situation has continued to worsen, with ad spend going up and sales becoming very erratic and decreasing.

My ACOS for the past 7 days has gone to 45.56%, so I’m running at a big loss, paying Amazon for the “privilege” of advertising for very few sales. This has become a total rip off and shaken my faith / trust in Amazon.

I sell a unique quality Home & Kitchen product, which Amazon is denying their buyers the opportunity of even seeing. I will have to revert to organic sales only and focus on building my business on other platforms.

I’m still hoping this is a technical glitch and not just pure greed. What on earth can they be doing?
Does anyone know what’s going on ?

#2

Same here, no idea what’s going on. My products are mostly under £5 and when I ask SS they say I need to increase my bids and campaign. Having items at a low margin already, I cannot afford to have them higher than I already have. My ACOS sits at 24% however, 5-6 months ago it was at 8%.

I keep getting emails and phone calls from the advertising department telling me to increase my bids and daily budget, also emails every 2-3 days to sign up to their webinars so they can show me how to increase it (because apparently I don’t know how to).

I believe they are losing money, hence the reason they want sellers to keep increasing budgets and bids so they (Amazon) continue to make money while for sellers like us we get conned.

I’ve already had to let go of 2 hard working people (which was very sad) end of September, let’s see what happens in the coming months.

Apparently no one knows what’s going on and seller support will not tell you anything apart from ‘there is nothing wrong from our side, have you heard of Sponsored Ads?’

#3

Yes, I also get constant emails offering advertising webinars. I’ve participated in a few of them and although they were decent enough, they seem to be mostly for beginners. My conclusion is that Amazon is trying to educate more sellers to spend on Sponsored Product Campaigns, to drive up the competition and thereby their ad revenue.

#4

Though the Amazon “tutor” who took one of the webinars did not recommend spending more than 35p per bid, which makes no sense !

#5

I got told that due to the competition we would recommend you bids to match some of the items. I told her that some bids are £1.60, and she told me you should match that and increase your daily budget to £30.

#6

My ACOS has now increased to 91.84 % for the past 7 days ! (This is from the previous norm of between 4 to 6%) My sales have totally flat lined at 0
Has anyone had a similar experience?
Please help if you can.

#7

We stopped running sponsored ads as we thought they were a waste of money. The last time we ran them was in September and we were running out of budget almost straight away and were receiving emails from Amazon recommending what we increase our budget to. For a few days we kept increasing our budget in line with the Amazon emails . After a couple of hundred pound and zero sales, we decided enough was enough and will no longer run any sponsored ads.

We seem to get more emails than ever from Amazon trying to entice us in to taking out adverts but looking back over our data, we actually sell more when we don’t run sponsored ads, so my deleted folder is filling up these days.

#8

I got told the same thing by Seller Central, totally contradicting the Sponsored Product Webinar advice given.

#9

Yeh they do that most the times, it’s like they are bots and no one really reads what we sellers are trying to say.

#10

It told me to increase my budget from £5 daily to £1400. Good times

#11

Ads used to be fab until the beginning of Sept. Whatever changes they meant caused our spend to go through the roof with no results. I have tried tweaking them to no avail. They are now turned off until Amazon sorts itself out. Our items are in Handmade and we are all complaining it is as though something broke Amazon then and it hasn’t been fixed yet.

#12

Completely agree. I posted in the forum a similar experience a few weeks back. Our average bid range for our top 4 keywords increased +200% with the top end bids more than the category average price! Budgets were lasting at best 4 hours and sales flat lined - this all happened for us on 3rd September. As a result we have went 100% organic as we have no option. The only person making money it seemed was Amazon.

#13

It seems very clear that SOMETHING happened with the algorithm at the start of September.
It would be a very nice Christmas present if Amazon were transparent about what went on :partying_face:

#14

We have paused ours too.

#15

I think a simple explanation is that Amazon have been pro-actively recruiting thousands of chinese sellers to sell directly on Amazon - They tell them how to get VAT numbers, ship directly to FBA etc so you have a massive number of new sellers and products all being added with Amazing images (usually non compliant with Amazon TOS but they never take them down) a very small likelyhood of VAT actually being paid (no extradition treaty with China so no jeapordy for not sending the money or being truthful on returns). Consequently they have bigger budgets and margins to spend on ads which helps them to organically rank their products (hence the massive increase in costs)- along with the fake review farms, honest sellers days are numbered!

#16

I have started trying to sell on here for the past months now and initially I was seeing around 150% ACOS using automated sponsored ads.

I received a call from someone who was going to help “reduce my ACOS”. I thought “great Amazon are going to help me”, but the only thing they did was convince me to send my products to FBA. Since then they did not help me with a single thing and even caused me to miss out on a relevant promotion when I converted my products to FBA!

So I made some changes myself and now on a good day, on an average selling price of £15 pr item I am paying Amz £6 for FBA and £6 for advertising which leaves me with £3 before tax. As you can tell not much change at all. On top of that their sponsored ads are all over the place. I cannot understand the pattern to it they definitely do not seem to have my best interest at heart when spending my money on advertising they are just popping the items up all over the place.

I have been working in Logistics and high end eCommerce operations for the best part of 20 years and I must say selling on this site feels like I am working in a sweat shop being paid under living wages. We never treated our suppliers this badly or greedily and I am very surprised how much they can get away with.

Ill be honest and say it is actually a nasty and depressing experience. I have played by the rules to the best of my knowledge but I have even got this underlying fear that after investing in lots of stock to try an build our business here we may get deactivated for doing something wrong we are not even aware of or even worse as I have seen other peoples blogs for something we haven’t even done!

Selling on Amazon is a very unhappy experience for many (not all sure) and it gives a bad name to what ECommerce is all about. Its like going back to the dark ages!

#17

Hi Liv

You describe the situation so well ! It is like a sweat shop, so best to build your business elsewhere for your long term success and sanity. I’m still grateful to Amazon for giving me my Ecommerce start and my ongoing sales, but they certainly don’t have sellers interests at heart. There will be a backlash. I believe their greed and lack of transparency will precipitate their ultimate downfall, but it won’t be for a very long time. In the meantime, there are other platforms with good ethos and energy which are taking advantage of Amazon’s poor seller reputation.
Best wishes.

#18

Not exactly a “solution” but if you’re moving away from sponsored ads have you tried vouchers?

You pay the fee after sale, not per-click so the cost is static, however they can be a little expensive if your items are extremely low price as you need to offer a minimum 5% discount too.
On an £18 item that usually gets 1-2 sales per month we’ve been running a voucher since 1st July at 5% off we’ve received 7 sales and 17 voucher redemptions (which can be used later).
You pay £0.45 per sale plus of course the cost of the discount. (in terms of accounting you receive the full value of the item and then pay the discount as an advertising fee).

They’re not as effective as sponsored ads are (or… usually are, ours have all been paused now too)
but they work out considerably cheaper in most cases.

#19

I’ve come across some software called Seller Labs. It allows you to schedule your campaigns. So you can automate them to run during the hours of the day you are seeing the most sales to reduce the acos.

I am going to run a week normally then using the scheduler to only run my campaigns during good daily sales periods based on this weeks data.

Thought I would mention it as it may help reduce clicks from less-committed customers.

As a general rule in fashion Ecom the daily peak is between 6pm and 9pm after people have finished their work day.

#20

When you increase bids, you need to be prepared for more negative keywords, which is the reason why your spend has increased drastically. Run through a report and see where your spend is going. Everything above 15% Acos have them put into the negatives. Anything above 5-10 clicks with no sales put them into the negatives. Keep digging!

Try bid placements and have them shown at the top of search results rather than everywhere. Bid up and down is for the newer business, so if you are more established then select bid down only for it to be more cost effective for you.

Try a fixed bid campaign starting low and work your way up with increments of 2p to see exactly what bids work well for your products. Fixed bid are controlled only by you.

Good luck!