Amazon PPC · worked example · AUD
How to set Amazon PPC bids from your margin: one product, worked end to end.
One real-looking product, one month of search term data, three rows. Every number is shown with its working, so you can swap in yours and get a bid you can defend.
The product is the 1.2 kg kitchen set from our Amazon Australia seller fees page. Amazon fee rates come from sell.amazon.com.au/pricing, read 10 October 2026. Landed cost, conversion rates and the search term rows are example data, not from a real account.
Step 1. Contribution per unit
A stainless-steel mixing bowl set sold on Amazon.com.au at A$59.00 by a GST-registered seller. Home and Kitchen pays a 13% referral fee. The 30 x 22 x 12 cm box has a dimensional weight of 1.98 kg, so FBA charges the 1.501 to 2 kg parcel band.
| Line | Per unit | Working |
|---|---|---|
| Shelf price | A$59.00 | GST-inclusive |
| GST | −A$5.36 | 59.00 ÷ 11 |
| Referral fee | −A$7.67 | 13% × 59.00 |
| FBA fulfilment fee | −A$9.81 | Parcel, 1.501 to 2 kg |
| Landed cost (example) | −A$14.50 | Ex GST |
| Storage | −A$0.59 | About 2 months of cover at A$37.00 per m³ |
| Unsellable returns (example) | −A$0.80 | |
| Contribution before ads | A$20.27 |
Everything after this depends on that A$20.27. If the landed cost is a guess, the bid is a guess. The contribution margin guide lists what belongs in it.
Step 2. Break-even ACoS
Break-even ACoS = contribution ÷ shelf price = 20.27 ÷ 59.00 = 34.4%. At 34.4% ACoS every ad-attributed sale earns exactly nothing. Divide by the shelf price, not revenue ex GST, because the sales figure in your ad reports is the price the shopper paid. Dividing by the ex-GST figure gives 37.8% and makes you overbid by about 10%. The break-even ACoS calculator does this step.
Step 3. Decide what each unit must keep
Break-even is a ceiling, not a target. This seller wants A$8.00 per unit left after ads to cover fixed costs and profit.
| Measure | Formula | Result |
|---|---|---|
| Allowable ad cost per order | 20.27 − 8.00 | A$12.27 |
| Target ACoS | 12.27 ÷ 59.00 | 20.8% |
| Break-even ACoS | 20.27 ÷ 59.00 | 34.4% |
Anything between 20.8% and 34.4% ACoS still makes money, just less than the plan. Above 34.4%, each ad sale loses money.
Step 4. Conversion rate, per search term
CVR = orders ÷ clicks, taken from the Sponsored Products search term report over at least 30 days. Use the rate for the search term, not the campaign average. In the rows below it runs from 0% to 9.8% for the same product.
Step 5. Max CPC
Max CPC = allowable ad cost per order × CVR. Amazon Ads is cost-per-click, and your bid is the most you are willing to pay for a click (Amazon). So the bid should never sit above this number for long. The table shows how quickly the ceiling moves with conversion rate.
| CVR | Max CPC, keep A$0 (break-even) | Max CPC, keep A$4 | Max CPC, keep A$8 |
|---|---|---|---|
| 6% | A$1.22 | A$0.98 | A$0.74 |
| 8% | A$1.62 | A$1.30 | A$0.98 |
| 10% | A$2.03 | A$1.63 | A$1.23 |
| 12% | A$2.43 | A$1.95 | A$1.47 |
| 15% | A$3.04 | A$2.44 | A$1.84 |
A two-point drop in conversion, from 10% to 8%, cuts the safe bid by 25 cents. That is why a bid set once at launch drifts into losing money as the listing ages, competitors arrive or reviews change.
Step 6. Three search term rows, three decisions
Example data: 30 days of one exact-match ad group. Allowable ad cost per order is A$12.27: the A$20.27 contribution minus the A$8 profit we want to keep. The last column is the max CPC that still keeps that A$8, which is A$12.27 × the term's CVR (for example A$12.27 × 9.8% = A$1.20).
| Search term | Clicks | Spend | Orders | Sales | CPC | CVR | ACoS | Cost per order | Max CPC (keep A$8) |
|---|---|---|---|---|---|---|---|---|---|
| mixing bowl set stainless steel | 214 | A$246.10 | 21 | A$1,239 | A$1.15 | 9.8% | 19.9% | A$11.72 | A$1.20 |
| mixing bowls with lids | 96 | A$153.60 | 6 | A$354 | A$1.60 | 6.25% | 43.4% | A$25.60 | A$0.77 |
| bowl set | 41 | A$57.40 | 0 | A$0 | A$1.40 | 0% | n/a | n/a | A$0.00 |
Row 1: hold. A$11.72 per order is just under the A$12.27 allowance, and the A$1.15 CPC is under the A$1.20 ceiling. Do not raise it to chase volume. At 9.8% CVR, every 10 cents of extra CPC costs about A$1.02 per order.
Row 2: cut the bid to about A$0.75. Each order cost A$25.60 against A$20.27 of contribution, so the term lost A$5.33 per order before fixed costs. Six orders is a thin sample, but the bid would need to fall by half before the term even reached the target. Lower it now, then recheck after roughly another 100 clicks. Also check the listing: if the bowls come without lids, the term will never convert well and should be negated.
Row 3: negate it. A$57.40 with no orders is 4.7 times the allowable cost of one order. If "bowl set" converted like row 1 (9.8%), the chance of 41 clicks with no order is about 1.5% (0.90241). The broad term is mostly shoppers after other bowls. Add it as a negative exact in this ad group, and keep the specific terms that do convert.
What should move the bid next month
- A price change. A A$5 discount takes A$3.90 off contribution: A$4.55 less revenue after GST, offset by A$0.65 less referral fee. At 9.8% CVR that is 38 cents off the max CPC, unless the lower price lifts conversion enough to pay for it.
- Q4 storage. Amazon.com.au storage rises from A$37.00 to A$51.80 per m³ from October to December, which costs this product about A$0.23 a unit across two months of cover.
- Conversion rate. Recalculate per term every 30 days. It moves the bid more than anything else.
The same steps on your numbers
- Amazon PPC bid calculator: steps 3 to 5 in one form.
- Break-even ACoS calculator: step 2.
- Amazon profit margin calculator: step 1, with post-ad contribution.
- Profit-Safe CPC vs Fundable CPC: why cash on hand can push the working bid below the profit ceiling.
- TACoS calculator: whether the ad spend is lifting total sales, not just ad sales.
CEILR runs this arithmetic across a catalogue from the search term reports you import, and shows the Profit-Safe CPC beside each term. It is read-only to Amazon and never changes a bid itself. You make the change. See Amazon PPC software for how that works.
Example data only. The fee rates are Amazon's published Australian rates as of 10 October 2026. The product, landed cost and search term rows are illustrative. CEILR is independent from Amazon.
Bids from contribution, not from habit