Bidding Strategies: Dynamic vs. Fixed Bids

Now that you’ve mastered the basics of Amazon bidding, you’re ready to take your Amazon bidding strategies to the next level. Bidding isn’t just about the highest price— it’s about strategically managing your budget to optimize visibility while controlling costs and maximizing sales.

With the right bidding strategy, your ad can get the best placement, and you can achieve your target ACoS. In this article, we’ll explain Amazon bidding strategies and how to adjust your bids effectively while automating the process to save you time and money.

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Dynamic vs. Fixed Bids

There are three main Amazon bidding strategies:

1. Up and Down Bidding: Automatically adjusts bids based on the conversion likelihood
2. Down Only Bidding: Lowers bids when conversions are less likely
3. Fixed Bids: Keeps your bid the same across all placements, regardless of conversion probability

What is Up and Down Bidding?

Amazon’s up-and-down bidding raises bids when conversion probability is high and lowers bids when it’s low. This strategy helps maximize sales efficiency by adjusting bids in real time.

How up and down bidding works

As an example, let’s say you as an Amazon seller, set a bid for a keyword, but it’s too low for your product to appear at the top of the search results.

Your product would theoretically appear mid-page with the bid you have set.

At this point, Amazon analyzes historical data and calculates whether the product would sell more if it were at the top of the search results instead of the middle of the page.

If Amazon expects a higher conversion rate, it will increase the bid to the minimum amount necessary to win the top-of-search auction. It can increase the bid by up to 100%.

Many sellers do not use this feature because they believe that Amazon has a conflict of interest and increases the bid only to make them spend more. In reality, this increase only occurs if a higher conversion rate is expected.

In cases where Amazon predicts a lower likelihood of sale, it will reduce the bid per click.

With Advigator, the up-and-down bidding is always active and automatically disabled if the campaign’s actual ACoS exceeds your target ACoS by 5 percentage points.

When to Use Up and Down Bidding?

This strategy is best for profit-focused campaigns with a lot of flexibility. Keep a close watch on ad spend, as Amazon can double your bids for high-conversion opportunities and you may accidentally spend more than you intended.

*This is the strategy recommended by Advigator but you can change the values

What is Down-Only Bidding?

Down-only bidding automatically reduces bids when the conversion likelihood is low. It helps optimize costs by preventing overspending on less profitable clicks.

When to Use Down-Only Bidding?

This strategy is best for maximizing profits when you’re new to managing campaigns or when you want to reduce costs without increasing the bid amounts.

What are Fixed Bids?

With Fixed Bids, Amazon applies your set bid across all placements without any adjustment. While this approach can generate more impressions, it may lead to fewer conversions and higher costs.

When to Use Fixed Bids?

This strategy is best for product launches, brand visibility boosts, or when impressions are the main goal.

What’s the Best Amazon Bidding Strategy?

Choosing the right bidding strategy depends on your goals. For maximum flexibility and cost control, dynamic bidding strategies often provide the best results.