Amazon advertising has become an essential part of scaling any successful eCommerce business. For sellers generating six or seven figures annually, ad spend can quickly become one of the largest line items in the budget. But how much should a high-earning Amazon seller really spend on ads? The answer isn’t one-size-fits-all. It’s driven by your business goals, profit margins, and your understanding of Amazon’s advertising ecosystem.
Understanding ACoS and Target ROAS
Before diving into specific numbers, it’s important to understand Advertising Cost of Sales (ACoS) and Return on Advertising Spend (ROAS). These are the key metrics Amazon sellers use to measure the profitability of their campaigns.
- ACoS = (Ad Spend ÷ Ad Revenue) × 100
- ROAS = Ad Revenue ÷ Ad Spend
If your product has a profit margin of 30%, you might aim for an ACoS below 30% to remain profitable. However, top sellers often run campaigns at or even above break-even ACoS to drive organic ranking and longer-term sales growth.
How Much Should 6- and 7-Figure Sellers Spend?
While beginners might tiptoe with a few hundred dollars in monthly ad spend, 6- and 7-figure sellers approach Amazon PPC more strategically. Your target monthly ad budget typically ranges between 5% to 15% of total revenue. Here’s how it breaks down:
- 6-Figure Sellers: Spending between $2,000 and $10,000/month depending on niche and competition.
- 7-Figure Sellers: Regularly allocating $20,000 to $100,000+/month, often split across Brand, Sponsored Products, and Sponsored Display campaigns.
That said, the exact amount depends on business objectives. Sellers may choose to overspend temporarily during:
- Product launches
- Prime Day and holiday seasons
- Entering new markets
In these times, ad spend might spike to 20–30% of monthly revenue to build momentum and gain market share.
Calculating a Smart Ad Budget
Here’s a simple 3-step approach that successful sellers use:
- Know Your Break-Even ACoS: This comes from your unit economics. Knowing when you’re losing or printing money is essential.
- Set Goals: Decide whether your focus is on profit (low ACoS), ranking (high ACoS), brand growth (diversified ads), or a mix.
- Align Budget with Goals: Budget higher when growing aggressively or launching new products. Scale back during maintenance periods for mature listings.
Allocating Your Ad Spend
It’s not just how much—you should also assess how your ad budget is distributed across campaign types:
- Sponsored Products: 60–80% of total budget. High-converting and great for ranking.
- Sponsored Brands: 10–25%. Ideal for brand awareness and showcasing product range.
- Sponsored Display: 5–15%. Useful for retargeting and cross-selling.
Using Amazon’s built-in tools like Campaign Manager, as well as 3rd-party PPC platforms, can help monitor performance and reallocate budgets for maximum ROI.
Scaling Responsibly
As sellers scale, they often fall into the trap of throwing more money at ads expecting instant results. But more spend doesn’t always mean better performance. Monitor campaign efficiency, control ACOS, and continually optimize keywords and placements.
Tip: Look at TACoS (Total ACoS), which compares ad spend to total revenue, not just ad-driven revenue. This provides a much better overall picture of advertising efficiency across your business.
FAQ: Amazon Ad Budgeting for 6- and 7-Figure Sellers
Q1: What is a healthy ACoS for a 6-figure seller?
A: While this depends on your product’s profit margin, a healthy ACoS for sustained growth is typically between 20–30%. During launches or branding pushes, it may go higher temporarily.
Q2: Should I allocate ad budget equally to all products?
A: No. Invest more into your best-sellers and proven listings. Lower-volume products with poor conversion may not yield positive ROI from ads.
Q3: How often should I review my ad campaigns?
A: Weekly reviews for smaller accounts and daily reviews for accounts spending $10,000+/month are ideal. Adjust based on performance trends and seasonality.
Q4: Is using external PPC software worth the expense?
A: For 6- and 7-figure sellers, yes. Platforms like Quartile, Perpetua, or ZonTools offer automation and optimization that often boost efficiency and reduce waste.
Q5: When should I scale my Amazon ad budget?
A: Scale ad spend when ACOS is consistently below your break-even point, or when launching new products with strong potential and backed by keyword research.
Strategic Amazon advertising isn’t just about throwing money at ads—it’s about making every dollar earn. With smart budgeting and ongoing optimization, high-revenue sellers can drive consistent growth and remain competitive on the world’s largest digital marketplace.
Published on July 29, 2025 under .
