Amazon PPC A→Z · Lesson 1 · 2:04

What a click is worth to you

Work out the most an Amazon ad click can cost before it loses you money: profit before ads × conversion rate. Two products at the same $1.20 bid show why one makes money and the other loses it.

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Do this today

1. 1Pick your top 3 products. Profit before ads = price − cost of goods − FBA fee − referral fee − returns allowance.
2. 2Divide orders by clicks for each, from the last 30 days of Sponsored Products (longer if it has few clicks).
3. 3Multiply the two: that is the most a click is worth. Any bid above it loses money on the average click.

The common mistake

Copying a bid from a competitor or a guide. The same $1.20 click makes money for one product and loses it for another: the bid has to come from your own margin and your own conversion rate.

Chapters

1. 0:00Two products, same $1.20 bid
2. 0:20You pay for the click
3. 0:33Number 1: profit before ads
4. 0:47Number 2: how often a click buys
5. 0:57What a click is worth: $1.50
6. 1:09The tumbler: $0.75 a click
7. 1:24Same bid, opposite results
8. 1:35The common mistake
9. 1:44Do this today

TranscriptShowHide

1. 0:00What is one click worth to you? Here's how to work it out.
2. 0:04Two products. Both pay one dollar twenty a click.
3. 0:07Per hundred clicks, one makes thirty dollars. The other loses forty-five.
4. 0:13The difference is what a click is worth. Let's find yours.
5. 0:17Lesson one: what a click is worth to you.
6. 0:20On Amazon, you pay for the click, whether the shopper buys or not.
7. 0:24Your bid is the most you're willing to pay for that click.
8. 0:28So how much can a click cost before it loses you money? You need two numbers.
9. 0:33First, profit before ads. This water bottle sells for forty dollars.
10. 0:38Take away the cost of goods, the FBA fee, the referral fee, and a little for returns.
11. 0:44That leaves fifteen dollars before ads.
12. 0:47Second, how often a click buys. Four hundred clicks brought forty orders.
13. 0:53That's one click in ten. A ten percent conversion rate.
14. 0:57Fifteen dollars times ten percent is one dollar fifty. That's what a click is worth to this bottle.
15. 1:03Pay less than that, and the average click makes money. Pay more, and it loses money.
16. 1:09Now the tumbler. Same price, same fifteen dollars before ads. But its four hundred clicks brought only twenty orders.
17. 1:17One click in twenty. Five percent. So a click is worth just seventy-five cents.
18. 1:24Both pay one dollar twenty. A hundred clicks cost a hundred and twenty dollars.
19. 1:29The bottle sells ten and keeps thirty dollars. The tumbler sells five and loses forty-five.
20. 1:35And that's the common mistake: copying a bid from a competitor or a guide. The same click is worth different money to every product.
21. 1:44So today, pick your top three products. Work out profit before ads, and orders divided by clicks. Then multiply the two.
22. 1:53Any bid above that number buys clicks at a loss.
23. 1:57Next lesson: where to set your bid, now that you know the ceiling. See you there.

Not affiliated with Amazon. Numbers in this video are a worked example. Published 24 October 2026.