Let's dive right in.

First off, let’s start with the important metrics which I pulled from Sellerboard for this case study.

October 2023 Sales: $167,569.22

October 2023 Units Sold: 7,263

October 2023 Profit: $28,356.62

October 2023 Profit Margin: 16.92%

October 2023 Spend: $32,742.11

November 2023 Sales: $151, 219.80

November 2023 Units Sold: 6,794

November 2023 Profit: $36,035.13

November 2023 Profit Margin: 23.83%

November 2023 Spend: $17,722.84

Now, let’s move onto a few key insights from these numbers.

Sales actually DECREASED from October to November by $16,349.42 BUT profit increased by $7,678.61. 

Also, ad spend decreased by $15,019.27. This was intentional. We dialed back because we were overspending.

Here's what we did to increase profit and profit margin.

I noticed that one of our recent launches saw a massive increase in competition. This caused advertising conversion rate to drop and ACoS to go up. Ads just were not as effective as before. Also, organic sales dropped as a result of the competition taking sales.

We can’t control competition. We just have to adjust our strategy accordingly. 

Also, we were running ads for low volume SKUs that just weren’t performing. We wanted to test them to see if we could gain traction so we targeted highly relevant keywords but the CPC was too high and so was competition.

And that’s okay. 

Not every test we perform is a winner. 

To summarize, an increase in competition and running ads on low volume SKUs decreased margins.

Back to what we did to increase profit.

I built a Microsoft Excel automation that allows me to see conversion rates and average daily spend of individual campaigns.

After doing an analysis I decreased budgets on low conversion rate campaigns and campaigns with no sales.

I used 14 days as my timeframe for the budget adjustments. 

I also tested pausing campaigns completely for lower volume SKUs and this worked like magic. One of the products saw no decrease in sales after pausing all campaigns. Profit margin improved dramatically for this product. 

It went from break even to 20% margin.

Another optimization we made was pausing all Sponsored Brands, Sponsored Brands Video, and Sponsored Display campaigns. 

Now, this might have been a controversial decision but it needed to be tested.

Finally, we capped the account. 

This had the largest impact on profitability.

Here is the calculation I used to create my account cap.

I took the last 14 days' sales and divided them by 14 to give me a daily sales average.

I set my target TACOS to 12% so I multiplied my daily sales average by 0.12 to give me my initial account cap.

My calculation gave me $645 for the account cap.

The goal here with the cap was to increase profit while I optimize campaign budgets so we don't need the cap in the future.

After testing different account caps we went from spending $1,032 per day to $571 per day and sales only decreased by 9.76%. 

This told me that our products were strong enough organically that we didn’t need to be as aggressive with ads. 

So that’s it.

That’s how we increased the profit margin for an Amazon beauty brand from 16.92% to 23.83% in one month with Amazon PPC. 

If you’ve made it this far in the post and are interested in getting my FREE Amazon PPC automation then click here.