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Amazon PPC
Chris Rawlings argues that setting and adjusting Amazon PPC budgets correctly is nearly as important as bid management for ad profitability, that budgets should be derived from a pre-built campaign planner (using TACoS-based math for existing products or a CPC/conversion/target-sales formula for new launches) rather than picked arbitrarily, and that ultimately bid management — not budget caps — is the real lever controlling spend and profit.
98% of sellers mismanage budgets (only ~1 in 50, or 2%, get it right), based on the speaker's personal experience with clients.
Doing budgets right generates more profit, not more revenue — budgets are about profit, and this is what most sellers don't understand.
Never use Amazon's suggested daily budget, never just pick a number based on what you can afford, and never guess a number hoping to adjust later.
Before setting any single campaign's daily budget, first determine the overall account or per-product budget by planning all campaigns together in a campaign planner (spreadsheet, paper, or the speaker's own tool).
For existing products with sales history: Monthly ad budget = Target TACoS × Target Total Revenue; Daily budget = Monthly budget ÷ days in month.
TACoS (Total Average Cost of Sale) = ad spend ÷ total revenue, distinct from ACoS (ad spend ÷ ad revenue only).
Max daily budget without losing money = Break-even TACoS (i.e., product margin after COGS, shipping, returns, FBA fee, seller fee) × average daily sales revenue over the trailing 30 days.
Spending 100% of margin on ads (zero profit) is presented as a valid aggressive strategy to push sales, boost ranking, and grow market share.
For new product launches with no sales history: Daily budget = (CPC ÷ Conversion Rate) × Target Daily Sales.
CPC for new launches can be estimated from the advertising console's historical CPC view or, if no data exists, by averaging Amazon's suggested bid across several primary keywords — though the speaker does not recommend using suggested bid for actual bidding.
Conversion rate can be estimated from prior launch experience, a general 5–15% range, or pulled category-wide (all competing brands) from Brand Analytics → Search Analytics → Search Query Performance.
Target daily sales for a new launch should be set close to the average daily sales of page-one competitors (found via tools like Helium 10) to have a real shot at ranking.
After computing a total daily budget, it must be split across campaign types (SP Auto, SP Exact, SP Broad, SP Product Targeting, SB Video, SB Custom Image, SD Product Targeting, SD Retargeting) based on whether the goal is aggressive fast ranking or a lean, cost-efficient launch.
Amazon's Budgets tab (in Campaign Manager) shows 'average time in budget' per campaign, which combined with ACoS tells you whether to raise the budget (low time-in-budget, low ACoS) or raise bids instead (100% time-in-budget, low ACoS).
The 'bombshell': budgets don't actually matter if bids are set properly, since you shouldn't be hitting daily budget caps anyway — most spend control lives in bid management, not budget management.
Some sellers on the speaker's team deliberately set budgets ridiculously high so they're never hit, and control spend exclusively through bids and bid adjusters.
Even if budgets 'don't matter,' going through the budgeting calculations is still valuable because it clarifies what should be spent per day on ads, regardless of whether daily caps are used.
TACoS (Total Average Cost of Sale) — A ratio equal to total ad spend divided by total revenue (ad + organic), contrasted with ACoS which only divides by ad revenue. Apply: Use trailing-month ad spend and total revenue to compute your current TACoS, then set a target TACoS as the basis for next month's ad budget.
ACoS (Advertising Cost of Sale) — Ad spend divided by ad-attributed revenue only, as distinct from TACoS's total-revenue denominator. Apply: Track ACoS per campaign in the Budgets tab alongside 'average time in budget' to decide whether to raise bids or raise the budget cap.
Monthly/Daily Ad Budget Formula (existing products) — Monthly ad budget = Target TACoS × Target Total Revenue; Daily budget = Monthly budget ÷ days in month. Apply: For a product with sales history, set a target TACoS and a target revenue for next month, multiply them, then divide by days in the month to get a daily budget figure.
Break-even TACoS / Max Daily Budget Formula — Max daily budget without losing money = Break-even TACoS (product margin after COGS, shipping, returns, FBA fee, and seller fee) × average daily sales revenue over the trailing 30 days. Apply: Calculate your product's margin percentage after all variable costs, then multiply it by trailing 30-day average daily revenue to find the ceiling budget that spends 100% of margin on ads.
New Launch Daily Budget Formula — Daily budget = (CPC ÷ Conversion Rate) × Target Daily Sales, used when a product has no sales history to derive a TACoS-based figure. Apply: Estimate CPC and conversion rate for the category, decide a target daily sales volume for a successful launch, and multiply the cost-per-sale (CPC/conversion rate) by that target to get a starting daily budget.
Campaign Planner — A spreadsheet-style tool (Google Sheet, paper, or the speaker's proprietary tool) that lists every planned campaign for a product with its budget, summed to a total daily/account budget before any individual campaign is created. Apply: Chart every campaign you intend to run for a product with its planned budget, sum them to confirm the total fits your calculated overall daily budget, then create the campaigns in Seller Central using those numbers.
Suggested Bid as CPC Proxy — Using Amazon's suggested bid figures (visible under Manual Targeting → Keyword Targeting) as a stand-in for average CPC when no other launch data exists, while not endorsing suggested bid for actual bidding. Apply: For a brand-new launch, pull suggested bids for several primary keywords and average them to estimate CPC for the new-launch budget formula only.
Brand Analytics Search Query Performance (conversion benchmarking) — A Brand Analytics report (Search Analytics → Search Query Performance) that shows category-wide purchase counts and click counts per keyword across all competing brands, from which a conversion rate can be derived. Apply: Select your brand, choose the most recent full quarter, apply, then divide total purchases by total clicks for a target keyword to get a category-wide conversion rate estimate for the new-launch formula.
Core Campaign Type Framework — A structural list of the campaign types to plan for per product: SP Auto, SP Exact-match Keyword, SP Broad-match Keyword, SP Exact Product Targeting, SB Video (keyword and product targeted), SB Custom Image (keyword targeted), SD Product Targeting, and SD Retargeting. Apply: Populate the campaign planner with a subset or all of these campaign types, allocating more budget to single-keyword ranking campaigns for aggressive launches or more to product-targeting/video campaigns for leaner, cost-efficient launches.
Budgets Tab / Average Time in Budget Diagnostic — A view in Amazon's Campaign Manager, alongside the campaigns view, that reports each campaign's 'average time in budget' percentage alongside its ACoS. Apply: For a campaign with low ACoS, if time-in-budget is near 100% consider raising bids to capture more volume; if time-in-budget is low (e.g., 49%) raise the budget cap instead while keeping the same bid.
Bid Management as Primary Spend Control — The claim that if bids are set properly, daily budgets are rarely hit, so actual spend and profit control resides mainly in bid management (including bid adjusters) rather than budget caps. Apply: Set budgets high enough to never be a binding constraint, then control spend and ACoS directly by raising or lowering bids and bid adjusters.
The video reframes budgets as a profit lever rather than a revenue lever, positioning most sellers' mental model (bigger budget = more sales = good) as backwards.
The break-even TACoS calculation effectively equals product margin, meaning the 'max sane daily budget' is just margin dollars converted into ad spend — a way of saying you can spend your entire profit on ads without going negative, which the speaker frames as a deliberate zero-profit growth strategy rather than a mistake.
For new launches, using Amazon's own suggested bid as a budgeting input (while explicitly rejecting it as a bidding input) is a pragmatic workaround for having no historical data, not an endorsement of the suggested bid's accuracy.
The Brand Analytics Search Query Performance conversion-rate figure is category-wide (all brands competing for a keyword), not brand-specific, which the speaker treats as more reliable for a new launch than assuming your own future conversion rate.
'Average time in budget' functions as a diagnostic: 100% time-in-budget plus low ACoS signals underspending (raise bids to capture more volume at good economics), while low time-in-budget plus low ACoS signals a budget ceiling problem (raise the cap, keep the bid).
The video's own climax undercuts its 40-minute budgeting framework: after teaching detailed budget math, the speaker states budgets 'don't matter at all' if bids are managed properly, reframing budget planning as a diagnostic/planning exercise rather than the actual spend-control mechanism.
«there is one mistake in particular that almost all of you are doing that I'm going to cover in this video that if you're doing it we can't be friends»
— 00:19
«doing budgets right generates more profit not more Revenue budgets are more about profit than Revenue this is what most sellers don't get»
— 00:32
«so what the hell do I put in this box do I take Amazon's suggested daily budget no do not do that»
— 01:04
«tacos is total average cost of sale that means ad spend divided by total revenue»
— 03:08
«if I wanted to push it super aggressively and have zero profit but just really push sales so I can crank ranking and grow my market share»
— 05:53
«in general I don't recommend following Amazon's guidelines about suggested bid when bidding»
— 07:03
«budgets don't matter at all I'm serious this is not a joke budgets don't matter and the reason is this if you're setting your bids properly you shouldn't be hitting your daily budgets anyway»
— 17:49
«mostly all of your spend control is in your bid management not your budget Management»
— 18:04
«it's by far the most important lever you can pull»
— 18:48
«spoiler alert Amazon suggested bid is not the right bid to choose»
— 18:59
Reception
Viewers found the video genuinely helpful and appreciated Chris's PPC budgeting advice, with most engagement being grateful comments and follow-up requests for templates/resources rather than criticism.
The video delivers concrete, formula-driven guidance (TACoS math, break-even budgeting, a new-launch CPC/conversion formula, and the time-in-budget diagnostic) but folds in an internal contradiction — spending the whole video teaching budget math before declaring budgets 'don't matter' next to bids — and includes at least one unreconciled arithmetic discrepancy in a worked example ($55+$390 stated as $895/day), alongside repeated promotion of the speaker's own consulting service and calculator.
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