Overview

Amazon's Sponsored Products campaigns run on a real-time auction system that determines which ads appear when shoppers search. Knowing how to set bids, choose the right strategy, and adjust for placement can make the difference between profitable advertising and wasted spend. Here's what every Amazon seller needs to understand about PPC bidding in 2025.

How the Ad Auction Works

Every time a customer types a query into Amazon's search bar, the platform runs an instant auction among competing advertisers. Two factors determine which ads win: the seller's bid and the ad's relevance to the search term. A high bid alone won't guarantee placement — your listing must also be well-optimized and closely matched to the shopper's intent. Sellers who pair competitive bids with strong, relevant listings consistently earn more impressions and better conversion rates.

Cost-Per-Click Basics

Amazon advertising operates on a cost-per-click model, so you only pay when a shopper actually clicks your ad — not when it's displayed. You set a maximum CPC, and the platform uses that ceiling during the auction. There are three ways to set your bid. A custom bid lets you manually choose an amount based on your own performance data. A suggested bid is Amazon's recommendation drawn from recent winning bids for similar products, which is helpful for newer advertisers. A default bid applies one flat amount across every keyword in a campaign or ad group.

One important detail: keyword-level bids always override default bids. This gives you granular control over high-value search terms while keeping a baseline for everything else. You can update bids at any time through the campaign manager.

Using Suggested Bids and Bid Ranges

Amazon publishes suggested bids and bid ranges to help sellers gauge the competitive landscape. Suggested bids reflect recent winning amounts from comparable advertisers, while the bid range shows the spread across most winners in your category. Both figures update daily as competition shifts.

You can find these recommendations in the targeting tab of your campaign dashboard or during campaign creation. However, treat them as starting points rather than gospel. If you have specific ACoS or ROAS targets, set bids according to your own margins and goals first, then refine based on actual performance data. Following suggested bids without considering your unit economics is one of the most common mistakes new advertisers make.