Calculate your maximum cost per click

Amazon does not take a percentage, it takes a bid. From royalty, target margin and an assumed conversion rate you get the most a click may cost you.

How the maths works

Whatever a sale can carry in advertising is spread across the clicks it took to get there. At a 5 % conversion rate that is twenty clicks per sale.

Highest bid = royalty × (1 − margin) × conversion rate

Example: $5.29 royalty, 30 % target margin, 5 % conversion. A click may cost $0.19, and the ceiling without any margin is $0.26. Halve the conversion rate and the affordable bid halves with it.

Common questions

Where do I get the conversion rate?

From your Amazon Ads report: units sold divided by clicks. Without solid numbers any value is an assumption — move the slider around rather than trusting a single figure.

Should I bid exactly this amount?

It is a ceiling, not a suggestion. Amazon rarely charges the full bid, and bidding at the limit leaves no room for weaker days.

Why does the bid change with the conversion rate?

Because one sale has to carry the cost of every click that led to it. The more clicks it takes, the less each one may cost.