Solved: Losing Money on New Amazon Product Launches

Hi there,

Thanks for reaching out! Happy to give you some initial thoughts and guidance on your situation with Amazon PPC. It's a common problem, so don't feel like you're the only one wrestling with it.

What you're asking about – losing money on a new launch – is a really important bit of the puzzle, and your instincts are pretty much on the money. So let's get into it.

You're right to think about the initial loss...

First off, yes, it's almost always the case that you will lose money when you first launch a new item, especialy in a competitive market. Please don't panic about that. You need to reframe this in your head. You're not just "losing money"; you're buying two things: data and momentum.

Buying Data: Every click, every impression, every sale (or lack thereof) is a piece of information. This data tells you which keywords work, which ones are a waste of money, what kind of price people are willing to pay, and whether your main product image is grabbing attention. Without spending money to get this traffic, you're just guessing. This initial period is all about paying to learn what works so you can stop guessing and start making informed decisions.

Buying Momentum: The Amazon algorithm loves sales velocity. When a new product starts getting sales (even if they're from PPC and at a loss), Amazon starts to see it as relevant. This helps it start ranking organically for the keywords that are driving those sales. So, the initial loss on PPC is an investment in your future organic sales, which are, of course, free. You're basicly kick-starting the engine.

So, how much should you invest at a loss? Tbh, there's no single number. It really comes down to your own situation. It depends on your product's profit margins (how much can you afford to lose per sale and still make it back later?), your total budget, and how aggressive you want to be. Some sellers will set a budget of a few hundred euros to gather initial data, while others in hyper-competitive niches might be prepared to burn through thousands to secure a top spot. The key is to see it as a fixed, planned investment for the launch phase, not an endless drain.

The real question isn't just how much to lose, but how to make sure that investment is working as hard as possible. You need to be methodical. This brings me to my next point.

We'll need to look at your campaign's vital signs...

If you're flying blind and just letting the campaigns run, that's where you can get into real trouble and lose money with nothing to show for it. You need to become an expert at reading the signs. I'm talking about looking at your performance metrics daily. These numbers tell you the story of what's happening and where the problem is.

Think of it like a funnel. People see your ad, some click it, some add it to their basket, and some buy it. You need to find out where they are dropping off.

-> Impressions but very low Click-Through Rate (CTR)?
If lots of people are seeing your ad but almost nobody is clicking on it, the problem is with the ad itself. On Amazon, this is almost always your main product image, your title, your price, or your review score. Is your main image eye-catching and clear? Does your title have the main keywords and benefits? Is your price competitive? A low CTR is your first warning sign that your product isn't standing out from the competition on the search results page.

-> Decent CTR but very few "Adds to Cart"?
Okay, so people are clicking. That's good. It means your ad is attractive enough to get them to your product page. But if they arrive and then leave straight away, the problem is with the listing itself. They clicked expecting one thing, but the page didn't convince them. This could be due to a few things:

• Your other product photos are poor quality.
• Your bullet points and product description are weak, unconvincing, or don't answer their questions.
• Your price seems too high once they've had a moment to think about it.
• You have bad reviews or not enough reviews to build trust.
• The traffic is wrong. The keyword they searched for might suggest they wanted something slightly different from what you offer.

I've seen this countless times with eCommerce clients. I remember one client selling maps and navigation products. Initially, their conversion rate was poor. We spent a lot of time optimising the listings, improving the photos to show the product in use, and rewriting the descriptions to focus on the benefits for travellers. It made a huge difference and we eventually got them to an 8x return on their ad spend. It all starts with diagnosing the problem correctly.

-> Lots of "Adds to Cart" but few Purchases?
This is less common on Amazon, as the checkout process is so smooth, but it can happen. Often it suggests people are using the cart as a "wishlist" or are comparison shopping. They add your product and a competitor's to their cart to decide later. This again points back to your listing and overall offer needing to be more compelling than anyone else's.

You need to be digging into these reports every day during a launch. Find the weak link in the chain and fix it. Don't just throw more money at a campaign with a low CTR and hope for the best. That's how you lose thousands instead of hundreds.

I'd say you need to become obsessed with your product listing...

Your Amazon product page is your one and only salesperson. If it's not brilliant, your ads will always struggle. Based on what I've seen with hundreds of campaigns, I can tell you that a weak product page is the number one reason why ads fail. You can have the best PPC strategy in the world, but if you send that expensive traffic to a page that doesn't convert, you're just setting money on fire.

Here are a few brutally honest observations I often make when looking at underperforming listings:

-> Product Photography: Mobile phone snaps on a messy background won't cut it. You need professional, high-resolution images. Your main image needs to be perfect, on a pure white background. Your other images should show the product from all angles, show its scale, and most importantly, show it in use (lifestyle shots). If it's a piece of clothing, show a model wearing it. If it's a kitchen gadget, show it in a clean, modern kitchen, actually being used. I remember one campaign we ran for a women's apparel brand where getting the lifestyle photgraphy right was a huge part of achieving a 691% return for them on Meta ads.

-> Product Descriptions & Bullet Points: Are they just a list of features? Or do they sell a story and a benefit? Don't just say "100% Cotton". Say "Made from 100% soft, breathable cotton for all-day comfort". Every bullet point should overcome a potential objection or highlight a key benefit. A professional copywriter can make a world of difference here. It's an investment that pays for itself over and over.

-> Building Trust: A new product has zero reviews. This is a huge barrier. Your initial PPC campaign is partly about getting those first few crucial reviews. You need to do everything possible to make your listing look trustworthy. This means professional branding (A+ Content if you're brand registered), clear warranty information, and answering customer questions quickly. My general impression of a lot of new stores is that they don't look trustworthy, and I wouldn't feel comfortable ordering. You have to overcome that feeling for every single customer.

Your homework is to look at the top 3 best-selling competitors for your main keyword. Look at their images, their titles, their bullet points, their A+ content. Be honest with yourself: does your listing look as good or better? If not, that's your priority. Fix the salesperson before you give it a bigger advertising budget.

You probably should rethink your keyword strategy...

Another area where people lose a lot of money is in their keyword targeting. Amazon's "automatic" campaigns can be a good way to start and find new keywords, but you can't rely on them alone. You need a manual campaign where you have full control.

You need to think about user intent. What is someone actually looking for when they type in a certain phrase? You want to target "buying keywords". These are phrases people use when they are ready to make a purchase.

Let's imagine you sell a high-end leather wallet:

• Bad keyword: "wallet" - This is way too broad. People could be looking for a cheap nylon wallet, a women's purse, a crypto wallet. You'll get loads of clicks that have no intention of buying your specific product.
• Better keyword: "leather wallet for men" - This is more specific. The user has narrowed down the material and the target user.
• Best keyword: "slim minimalist leather wallet with rfid" - This is a long-tail keyword. The person who types this knows exactly what they want. If you sell that product, this is highly relevant traffic and very likely to convert.

Your job in the initial data-gathering phase is to use a mix of these but quickly identify which keywords are actually leading to sales. You should be running search term reports regularly and adding any irrelevant search terms that Amazon is matching you with as "negative keywords". This stops you from wasting money on clicks from people who are not looking for your product.

I remember one client in a B2B space was struggling with lead costs. We helped them reduce their cost per lead by 84% largely by refining their keyword and audience targeting to be much more specific, cutting out all the wasted spend. The same principle applies here. Be ruthless about cutting out keywords that aren't performing after they've had a fair chance (e.g., after 10-15 clicks with no sale).

You'll need a structured approach to testing...

So, you've got all these things to improve: images, title, price, keywords. How do you know what's working? You have to test methodically. This is what we mean by optimisation. Don't change everything at once.

I’d always split test creative and targeting. On Amazon, this looks a bit different than on social media, but the principle is the same. Change one big thing at a time and measure the impact.

Week 1-2: Run the campaign with your best guess at a listing and keywords. Focus on getting enough data to see your baseline CTR and conversion rate. Identify your worst-performing keywords and add them as negatives.

Week 3: Think your main image is the problem? Change only the main image. Let it run for a week. Did your CTR go up? If so, you've found a winner. If not, change it back.

Week 4: Think your price is the issue? Lower it by 10% for a week. Did your conversion rate increase enough to justify the lower margin? Measure the result.

This slow, deliberate process is what separates people who successfully launch products from those who just lose money and give up. It takes patience. I remember for an eCommerce client selling cleaning products, we went through this cycle of testing and optimising, which led to a 633% return and a 190% increase in their revenue on Meta ads. Those results don't happen by accident; they come from a structured process.

I've detailed my main recommendations for you below in a table to give you a clear path forward.

As you can probably tell, this is a complex and time-consuming process. It's not just about setting up an ad and hoping for the best. It's about being a detective – digging into data, understanding customer psychology, and making dozens of small, informed adjustments that add up to a big result.

This is where getting professional help can make a huge difference. An expert has been through this process hundreds of times and can often spot the problems and implement solutions much faster, saving you a lot of money on wasted ad spend and getting you to profitability sooner.

If you'd like to go over your specific campaigns and product listing together, we offer a free, no-obligation initial consultation where we can give you some more tailored advice. It might help you see things in a new light.

Hope that helps give you a clearer picture!

Regards,

Team @ Lukas Holschuh