What the Bid Price Does
So what actually does the bid price do, What does it mean? Why are you paying $1? Why not? 50 cents? Wouldn't let's be better, What does that actually mean? So the amazon PPC market is just that it's a market markets similarly, the stock market go up and down. It's based on supply and demand. The supply is the amazon users searching for your specific term. And the demands are the advertisers in the market, let's say let's give an example. Your search term is computers. And there are 50 people advertising on computers. But there's only one person searching for computers. That means it's gonna cost a lot of money to bid on this one user that you're trying to target. And there's 50 different advertisers. It's gonna be really expensive. So basically the bid means that you're willing to pay up to a certain amount per click if you bid $1 it doesn't mean every click is gonna cost you $1 your CPC or cost per click, which we've talked about before won't cost $1 But it will be up to that. And th...
at means your maximum a click will cost will be $1. But that could result in a CPC of maybe different averages. Sometimes a click might cost 75 cents, 50 cents, 66 cents. $1. It will all average out in your CPC will be around that range. This is exactly how amazon makes money for every click. It will charge you a certain amount based on a variety of factors determine its algorithm and remember it's really really important to understand how amazon makes money because the more money they make, which is their goal is how they're gonna figure out how to change the algorithm around. So why would you pay more to increase your bid? Why why would that even be a possibility? Like why wouldn't I want to just pay 50 cents versus $5? So essentially it catapults you to the most relevant spot on Amazon. Remember Amazon wants to make money. So if you spend $5 for a keyword, they're gonna catapult you to the front if the average is around 50 cents. So this just basically means amazon is trying to make a lot more money and it's a supply and demand market. If you pay more, you're gonna get higher ranked but higher rank doesn't always mean better. Amazon has a different type of, a couple different types of ad formats. Sometimes they're on the side, sometimes they're on the top. Sometimes there's a different number of listings per page and sometimes you'll be on the second page, third page, first page, whatever you want. But it really depends on the type of keyword and we're gonna go through this for testing, looking at the search term report and determining the ideal cost, but your cost should be varying and should be understanding of that. So just remember that the bid price does vary a lot and you have to figure out what bid price you want to bid at because it can vary a lot and it can really determine if you're advertising is positive or negative, and it actually is worth it to you.