Solved: Amazon PPC Strategy for New Groceries Product

Hi there,

Thanks for reaching out!

Launching a new product on Amazon, especially in a competitive space like groceries, can feel like a bit of a minefield. It's smart to be thinking about your PPC strategy right from the start. I'm happy to give you some of my initial thoughts and guidance based on what we've seen work for other eCommerce brands. You've hit on a few really important points, and I think we can map out a clearer path for you that avoids some of the common, and expensive, mistakes people make when they're starting out.

The main thing we need to shift is the focus from being the 'cheapest' to being the most *profitable* and building a brand that can actually last. Let's get into it.

We need to talk about that "Lowest Price" badge...

Alright, let's tackle the biggest point first because it underpins everything else. You mentioned your product has the "Lowest Price" badge. On the surface, this sounds brilliant. It's a clear signal to buyers, and Amazon is rewarding you for it. But I have to be brutally honest with you: relying on this as your primary advantage is probably the single most dangerous thing you can do on the platform.

Think of it this way: your price is the easiest thing for a competitor to copy. It takes them five seconds to see your price and match it, or even beat it by a penny. Now what? You're forced to lower your price again to reclaim the badge, they follow suit, and before you know it, you're in a "race to the bottom". This is a war you cannot win, because there's always someone out there willing to make less money than you, especially larger sellers with deeper pockets or more favourable supply chain costs. In a price war, the only real winner is Amazon, who collects their fees regardless of how little profit you make.

The type of customer you attract with a 'lowest price' offer is also a problem. You attract bargain hunters, not brand loyalists. These shoppers have zero loyalty to you or your product. They bought it because it was cheap. Next month, if a competitor is a few pence cheaper, they will switch without a second thought. You're constantly spending money on PPC to acquire new customers who will never buy from you again. That's a leaky bucket, and it's an incredibly expensive way to run a business.

Your goal shouldn't be to be the cheapest. Your goal should be to have the best *perceived value*. This is a crucial distinction. Value is a combination of price, quality, branding, trust, and customer experience. A slightly higher-priced product with fantastic photos, glowing reviews, great branding, and A+ content can easily outsell the cheapest option because it has a higher perceived value. The customer feels more confident buying it. They trust that it's a better product. That's the space you want to compete in. The "Lowest Price" badge is a short-term tactic for launch velocity, not a long-term business strategy. We need to build a brand that people are willing to pay a fair price for, and that starts with understanding your numbers.

You're not building a product, you're building a profitable asset

Before you even spend £1 on PPC, you need to know your numbers inside and out. Most sellers just look at their Advertising Cost of Sales (ACoS), but ACoS can be misleading because it doesn't account for your actual profit margins. A "good" ACoS for a high-margin product could be a disaster for a low-margin one. The metric that truly matters is Return on Ad Spend (ROAS), and more specifically, a ROAS target that ensures every sale is profitable.

To do this, you need to calculate your break-even point. What is the absolute maximum you can spend on ads to acquire a sale without losing money? Once you know that, you can set a target that ensures you're actually making a profit. Let's forget guesswork. I've built a simple calculator for you below. Play around with it using your own product's numbers. This will give you your North Star for your PPC campaigns. Every decision you make—how much to bid, which keywords to target, which campaigns to scale—should be guided by whether it helps you hit your Target ROAS.

This number, your Break-Even ROAS, is powerful. If your calculator shows a break-even of 2.5x, and your campaign is running at 2x, you know you are actively losing money with every ad-driven sale. If it's running at 4x, you know you're making a healthy profit. This clarity allows you to make unemotional, data-driven decisions, which is the only way to succeed with PPC.

Your Amazon PPC Launch Blueprint: From Chaos to Control

Okay, now that we've established our goal (profitable ROAS, not just sales) and got our numbers straight, we can build the PPC campaigns. A lot of new sellers make the mistake of either just turning on an Auto campaign and hoping for the best, or they jump into creating dozens of manual campaigns based on guesswork. Both are recipes for wasting money. The right approach is a structured, phased process where each step informs the next. It’s a system of discovery and refinement.

Here’s how I’d structure it. I've made a flowchart to make it easier to visualise the process. This isn't just a set of campaigns; it's a workflow for continous optimisation.

Phase 1: The Discovery Campaign (Auto)

For your launch, you'll create one single Automatic campaign. That's it. Give it a modest daily budget, maybe £15-£25 per day. The purpose of this campaign is NOT to be profitable. I repeat, you will likely lose money on this campaign initially. Its only job is to be a research tool. You are paying Amazon to do market research for you. It will show your product for search terms and on product pages you might never have thought of.

Let this run for at least 7-10 days without touching it too much (you can lower bids on targeting groups that are spending a lot with no sales). You need to give the algorithm time to learn and collect enough data to be meaningful.

Phase 2: The Graduation Process (Analysis)

After a week or so, you'll dive into the Search Term Report for your Auto campaign. This report is absolute gold. It shows you the *exact* search terms customers typed into Amazon before clicking and/or buying your product. You're looking for two things here:

1. Winners: Search terms that have generated one or more sales. These are your proven money-makers.
2. Losers: Search terms that have a lot of clicks but no sales, or terms that are completely irrelevant to your product. This is your wasted spend.

For example, if you're selling "organic gluten-free pasta", a winning search term might be "gluten free spaghetti". A losing, irrelevant term might be "pasta making machine" or "cheese grater".

Phase 3: Building Control (Manual Campaigns)

Now, you take action based on your analysis. You'll create three new Manual campaigns: one for Broad match, one for Phrase match, and one for Exact match.

• When you find a winning search term in your Auto report, you will add it as a keyword to your new Manual campaigns. Let's say the term is "organic gluten free pasta". You would add it to all three:
  • As an Exact Match keyword `[organic gluten free pasta]` in your Exact campaign. This is your top performer. You will bid most aggressively here because you know it converts.
  • As a Phrase Match keyword `"organic gluten free pasta"` in your Phrase campaign. This will capture searches like "buy organic gluten free pasta" or "best organic gluten free pasta". You'll bid a bit less here than on Exact.
  • As a Broad Match keyword `organic gluten free pasta` in your Broad campaign. This is for continued research, capturing long-tail variations. You'll bid lowest here.
• Crucially: Once you move a winning search term to your manual campaigns, you must add it as a Negative Exact Match to your original Auto campaign. Why? To stop the Auto campaign from competing with your new, highly-controlled manual campaigns for the same traffic. This forces the Auto campaign to keep finding *new* search terms for you, continuing its research job.
• When you find a losing, irrelevant search term (like "pasta making machine"), you add it as a Negative Phrase Match to your Auto campaign. This tells Amazon to never show your ad for that search again, instantly stopping the wasted spend.

This ongoing process of 'harvesting' keywords from your Auto campaign and moving them into tiered Manual campaigns is the foundation of a scalable and profitable PPC account. You start with chaos (Auto) and systematically create control and efficiency (Manual).

You also need to look at product & category targeting...

Keywords are only half the battle. Amazon PPC also lets you target specific products (ASINs) and categories. This can be incredibly powerful, especially in the grocery category.

Product Targeting (ASINs)

This allows you to place your ad directly on your competitors' product pages. Think about it: a customer is looking at a rival's gluten-free pasta, and right there, below the bullet points, is your product, perhaps at a better price or with better reviews. It's the digital equivalent of placing your product on the shelf right next to the market leader.

How do you use this? In your Auto campaign's search term report, switch the view to see the ASINs your ad was shown against. If you find competitor ASINs that led to sales, you should 'graduate' them into a new Manual Product Targeting campaign, just like you did with keywords. You can also research your top competitors and manually add their ASINs to this campaign to target them directly.

Category Targeting

This is a bit broader but can be very effective. You can tell Amazon to show your product to customers browsing specific categories. For your pasta, you could target the "Dried Pasta" and "Gluten-Free Foods" categories. But you can also get clever. Why not target the "Pasta Sauces" category? Someone buying pasta sauce is very likely to also need pasta. This is a great way to find complementary buyers who might not be searching for your specific product type directly.

I'd recommend creating a separate campaign for Product/Category targeting to keep it organised and control the budget separately from your keyword campaigns. It's another lever you can pull to find profitable pockets of customers.

Coupons aren't a strategy, they're a tool

You asked about coupons and promos. My view on this is simple: they are a short-term tool for a specific purpose, not a long-term strategy. For a launch, that purpose is to drive initial sales velocity. Getting those first 5-10 sales and reviews is incredibly important. It gives you social proof and helps you start ranking organically. A small coupon (e.g., 10% off or a £1 off coupon) can be the little nudge a customer needs to take a chance on a new product with no reviews.

So yes, I would recomend enabling a modest coupon for the first 2-3 weeks of your launch. Monitor it closely. The goal is to get the ball rolling. Once you have a handful of positive reviews, you should consider turning it off or reducing it significantly. If you leave it running forever, you're doing two negative things: 1) training customers to expect a discount, which devalues your brand, and 2) permanently cutting into your profit margin, which makes hitting your Target ROAS much, much harder.

It's easy to forget how much a "small" discount actually costs you in pure profit terms. Let's look at the real impact on your bottom line. I've built another calculator to show you exactly how a percentage discount affects your actual profit per sale.

Your listing is your real salesman, so dont send a bad one to a sales meeting

This is the part that most new sellers overlook, but it's probably the most important of all. You can have the most perfectly structured PPC campaigns in the world, sending thousands of qualified shoppers to your page, but if your product listing page doesn't convert, you will lose money. Full stop. Your listing is your digital salesperson, and it needs to be brilliant.

Before you ramp up your ad spend, you need to be honest with yourself about your listing. Does it build trust? Does it answer questions? Does it make the customer *want* the product? Here's what you need to nail:

• High-Quality Imagery: For groceries, this is non-negotiable. You need more than just a clean shot of the packaging on a white background (though you need that for your main image). You need lifestyle images: show the pasta being cooked, served on a beautiful plate, being enjoyed by a family. Use infographics to call out key benefits like "Gluten-Free", "Organic", "Cooks in 8 minutes". A short video can be incredibly powerful too. People buy with their eyes, especially for food. Your images must make them hungry.
• Benefit-Driven Copy: Don't just list features; sell the benefits. Instead of saying "Made with brown rice flour" (a feature), say "Enjoy delicious, authentic pasta without the bloating - perfect for a gluten-free lifestyle" (a benefit). Your title and bullet points should be packed with your most important keywords, but written for a human, not a robot. Answer the customer's questions before they even ask them. What does it taste like? What's the texture? What meals is it good for?
• A+ Content: If you're brand registered (which you should be), use A+ Content. This is your chance to build a real brand on the page. Tell your story. Why did you create this product? What makes it special? Use beautiful modules with large images and compelling text to make your listing look like a premium landing page, not just a generic Amazon entry. This is a massive trust signal and helps justify a price that isn't the absolute lowest.

Think of it as a funnel. Your PPC ads get people to the top of the funnel (your page). Your listing's job is to get them through the rest of it to the checkout. A 1% increase in your page's conversion rate can have a bigger impact on your profitability than a 10% reduction in your ad cost.

You'll need an actionable plan...

That was a lot of information, I know. It's easy to feel overwhelmed. The key is to approach it systematically. Don't try to do everything at once. Focus on one stage at a time, get it right, and then move to the next. Tbh, this is the main advice I have for you:

As you can see, there's a clear methodology here. It moves from broad discovery to precise control, all guided by the profitability data you established right at the start. It takes time and attention to detail, but this is the difference between simply 'running ads' and building a profitable advertising system for your brand.

Navigating all of this during a product launch can be intense, and mistakes, especially in the early days, can be costly and set you back. Getting expert guidance can often accelerate the learning curve dramatically, helping you avoid common pitfalls and get to profitability much faster.

If you'd like to chat through your specific product and goals in more detail, we offer a completely free, no-obligation initial consultation where we can look at your situation together. It might help provide some more clarity on the best path forward for you.

Regards,

Team @ Lukas Holschuh