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TECH MARKETING

Sponsored Display just got a much-needed update, as revealed by a recent Amazon announcement. Bid recommendations, which were previously limited to static ad creatives, are now extended to video creatives!

With this, advertisers can now:

• Make relevant bid suggestions for audiences;
• Perform contextual targeting for video and image creatives; and
• Customize the elements of creatives, including the headlines, logos, images, and videos.

🌟 Competitive bidding all the way

First launched in 2021, bid recommendations aim to remove guesswork when launching ads. The feature shows advertisers a “suggested bid” and a “bid range” in their Sponsored Display console, which are calculated by analyzing other winning bids for recent similar ads within your category.

Currently, the feature can be used by Amazon sellers and vendors in the following regions:

• North America: United States, Canada, and Mexico
• Europe: Germany, Spain, France, Italy, Netherlands, United Kingdom
• Middle East: United Arab Emirates
• Asia Pacific: Australia, India, and Japan

🫵 Should you try it?

Video ads can drive 48% higher sales than static ads. It’s a no-brainer—you should take advantage of it ASAP to give your videos the attention they deserve!

Access the updated bid recommendations feature now via Amazon Ads API.

AMAZON NEWS

ICYDK: Here are the updated Amazon seller fees for 2024

We hate to be the bearer of not-so-good news, but there’s something you really need to know: Amazon recently updated its fulfillment and referral fees.

It’s a long list of fee updates, so without further ado, here’s a summary of the changes:

🚚 Fulfillment fees

• February 5, 2024 - A $0.04–$1.32 fulfillment fee discount will be offered for eligible products in the Ships in Product Packaging (SIPP) program. The discount depends on item size and weight.
• March 1, 2024 - An inbound placement service fee will take effect based on the following rates:
  • $0.27 per unit for standard-sized products
  • $1.58 per unit for Large Bulky-sized products
  • Note: You could pay reduced fees based on whether you’re sending to a single or multiple locations. Fees will be charged 45 days after products are received.
• April 15, 2024 - FBA fulfillment fees will decrease by:
  • $0.20 per unit for regular items 
  • $0.61 per unit for Large Bulky-sized products
  • An additional $0.77 discount applies to products priced below $10.

📦 Inventory fees

• April 1, 2024
  • A low-inventory-level fee for standard-sized products will be introduced. This applies if you carry consistently low short-term and long-term stock levels.
  • Non-peak (Jan to Sept) monthly storage fees will decrease by an average of $0.09 per cubic foot for standard-sized objects. Monthly storage fees remain unchanged for non-standard sizes.

💸 Other service fees

• January 15, 2024 - Referral fees for apparel products will ease down by:
  • 17% to 10% for products priced at $15–$20
  • 17% to 5% for products below $15
• February 5, 2024 - Multi-Channel Fulfillment (MCF) fees will rise 3.5% for all delivery options. 

Why is this happening?

According to GeekWire, Amazon is restructuring seller fees to match its regional fulfillment strategy. That is, to get products closer to customers while reducing outbound fulfillment.

Of course, sellers are unhappy with the changes, especially about the penalty fee for insufficient inventory. Understandably so, since they don’t have control over supply chain challenges.

What do you think about these changes? Will this greatly impact your operations next year? Share your thoughts by replying to this email! 🖱️

BITES OF THE WEEK

• 11 Takeaways: Here are the key takeaways from re:Invent 2023.
• ChatGPT’s Birthday: In honor of the friendly chatbot’s 1st anniversary, let’s rewind genAI's timeline of breakthroughs.
• 24/7 bidding: Amazon now lets you set up budget rules at specific times.
• No To X: Walmart says it won’t be advertising on X.
• 17 Reasons Why: FYI, Meta will reject your ads if they contain prohibited words.

TACTIC TALKS

3 ways to break even on customer acquisition

Did you know that brands lose an average of $29 per customer acquired?

Sounds crazy, but as per Practical Ecommerce, it can happen because your customer acquisition cost (CAC) is too high. Let’s say you received an order worth $100. If your shipping and product costs are $32 and $50, respectively, you’ll have an $18 profit:

But if your CAC (like your advertising expenses) is $35, then you actually lose by $17:

📍 If you don’t want this to happen, here are 3 things you can do to reduce your CAC (or at least break even):

• Cut advertising costs. Target lesser-known audiences or shift to direct mail marketing, at least until you can afford to spend more. The conversion potential may be low, but so are the costs compared to paid advertising.
• Optimize your advertising performance by focusing on your ad creatives.
• Invest in first-time buyers. They’re your best shot at increasing your profit margins. Direct your merchandising efforts on what audiences typically buy first. You can also throw in free shipping to pique their interest in your other products.

Pro tip: Increase your social media presence

It’s a cost-effective (almost free) way to increase brand awareness. The more exposure you have, the less money you need to spend on marketing. Plus, you’ll gain experience in social commerce, which is a good stepping stone to building a balanced, profitable ecommerce business. ⚖️