Amazon sells about 100 million products a day worldwide, and that number is only rocketing up as time passes. In this vast jungle of products, it’s crazy to think it can be boiled down to just two major groups — commodity and unique products.
Commodity products are products which are similar in how they’re built and their function. Think of things like iPhone charging cables, jump ropes, or printers.
Unique products are novel creations like something you might find on Kickstarter. Imagine cutting-edge items like wooden boomboxes, WiFi jump ropes, or captured carbon bracelets.
One of the most common mistakes is using the same paid advertising strategy for commodity and unique products. That’s why we’re breaking down how to tweak your PPC strategy to optimize for each one.
Regardless if you only sell commodity products or only sell unique products, there’s something to be learned from the techniques of both sides. Here’s what we’ll be covering:
Consider the Customer Perspective
Let’s start by viewing each product through the eyes of the customer. How they interact with every kind of product is the basis of how we advertise for them.
Imagine you’re on Amazon searching for something like an iPhone cable. When evaluating if a listing is worth buying, you’ll typically go through a series of binary decisions:
- Is this a reasonable price?
- Is it long enough?
- Does it have good reviews?
- Is it Prime eligible?
Likely the first product you see that checks “yes” to all these boxes will be the one you buy. There’s no emotional attachment to a commodity product, everyone just wants the best one for the job.
Now let’s do the same thing for unique products.
What makes unique products special is that you’re not going to find them elsewhere. So say you’re browsing through Amazon and discover a WiFi jump rope for sale. If this is something you really want, it’ll make you stop and read the entire product listing.
Evaluating different features is critical, and often times, people will be more forgiving if the product has a lower review count or a higher price.
This is because there aren’t a lot of alternatives to turn to if the product isn’t 100% perfect. Kind of like the old saying, “Beggars can’t be choosers.”
Goal Setting: Commodity vs. Unique Product
Now that we know how customers think, we can use that to inform what kind of goals we set for each type of product.
Goals for Commodity Products
Advertising for commodity products is a lot like how old school telephone operators used to work. The goal is to connect a user search to a keyword at the right time with the right bid.
So the significant top-line metrics to optimize for are sales and spend.
You want to focus your attention on putting out really well optimized keyword-based Sponsored Product ads because these are going to net you the biggest growth.
To get these right, it’s all about:
- Building a big keyword list
- Combing through it extensively
- Determining keyword themes
- Setting up bids correctly
- Monitoring placement settings
Furthermore, you want to make sure you pass a real query test. Amazon might say you’re bidding well above the suggested range, but if you search your product and you don’t show, you’re probably not winning those terms.
Let’s compare this with unique product goals, which turn out to be quite different.
Goals for Unique Products
With unique products, you want to get exposure, exposure, and more exposure! Advertising a unique product can be a bit like a double-edged sword. People might love it when they find it, but if they have no idea it even exists, no one will be searching for it.
The ultimate goal is figuring out your keyword themes and discovering what people click on and convert for.
For example, let’s say you’ve created the ultimate set of Bluetooth headphones. They’re more ergonomic, have better sound quality, and just plain better in every way.
When you first list this product, you might be bidding on a wide range of keywords like “HiFi earbuds,” “Bluetooth headphones,” or “audiophile.” If you’re not careful, you could quickly rack up several thousand dollars of spend with all those keywords.
We want to keep the keywords that are performing well, getting clicks, and making sales while removing the ones that aren’t doing well. We’ll do this by running Sponsored Product ads.
Once you’ve collected some data with your ads, it turns out that “HiFi earbuds” has gotten 2 clicks while “audiophile” has surged to the top with 100s of impressions, 8 clicks, and even a sale.
Now you can remove all the poor performing keywords from your list and double down on your best ones. I think we can all agree “audiophile” has earned a right to be featured in the title.
For unique products, Sponsored Product ads are the best way to figure out what kind of words resonate most with your product. You can worry about spending and ACoS after you’ve done that.
However, if you do all your keyword testing on Amazon, you’re going to burn through thousands of dollars before you get it right. We want to give ourselves the best possible starting point with a good keyword research strategy.
Keyword Strategies and Match Types
You have to use a bit of common sense when picking out your initial group of keywords. From our previous example, something like “audio equipment” could mean so many things besides Bluetooth headphones. It’s not a good keyword.
So how do you get a good starting set of keywords? We’ve suggested some keyword tools in the past, but today we’ve got a new strategy based on good intuition.
When it comes to unique products, you should be searching for keywords with uncommon, extra descriptors. These unique selling points will really help your product stand out. Furthermore, people who buy niche products generally use longer-tail keywords like these.
For instance, “HiFi,” “Bluetooth,” and “wireless” are all technically sound descriptors of your product, but none of them shine the spotlight on what makes your product special.
Keywords like “ultra-lightweight,” “active,” and “athletic” are all much better because they highlight what makes your product unique and not a commodity. Believe it or not, but you can assemble a phenomenal 200+ keyword list just by racking your brain a bit. You know your product better than any keyword tool.
Selecting Match Types
The general principle for both types of products is to eventually move from broad match types to a laser-focused exact match type list of keywords. You want to have control over all the clicks you’re getting on your ads.
A good campaign structure is to have negative keywords in your automatic, negative exacts in the broad, and exact match with your keyword list. This works exceptionally well for commodity products.
Using Lightning Deals and Coupons
If you’re someone who uses Lightning Deals or coupons a lot, you might want to double-check how you’re using them.
Commodity products are already pretty competitive, so you don’t have a lot of margin to sacrifice for a discount. However, this is offset by the fact that customers like deals, and if your product has a discount, it will perform better.
We’ve even seen some products that are basically permanently running a 5% discount to get that extra edge. Overall, Lightning Deals and coupons are definitely worth it for commodity products.
For unique, Kickstarter-like products, coupons can be very successful, but you’ll need to offer a steep discount. You’re already at a disadvantage because people haven’t heard of your brand, or you have low social proof.
To mitigate this, you need to entice them with a massive discount that will reduce the risk of buying your product. You want customers to feel like they didn’t waste their money if they don’t like the product.
In conclusion, Lightning Deal and coupons are a good strategy for unique products as well.
Check out more info about how Amazon coupons work.
Your PPC strategy is directly tied to the product you’re trying to sell. That’s why it’s crucial to figure out if your product is a commodity or unique and apply the right techniques.
Hopefully, now you’re ready to jump over to Amazon Seller Central and make these changes to your own account.
As always, leave a comment if you find this info useful or have a question! Badger Out.
Discover Us on our PPC Den Podcast
If you prefer learning via audio, we cover this same info in the podcast episode below. You can also find us on your favorite streaming platforms like Apple, Google, Spotify, and more!
- 2:50 About our guest Lukas Matthews
- 5:45 Commodity vs. unique products
- 10:55 Goal-setting for commodity products
- 13:30 Aim for discovery instead of sales for unique products
- 16:50 When to use a laser or a shotgun for your keywords
- 21:30 Controlled vs. uncontrolled clicks
- 22:53 Find keyword trees for commodities
- 24:25 Long-tail, niche keywords are better for unique products
- 27:55 Saturate everything above the fold
- 29:00 The real value of Lightning Deals & coupons
- 34:20 Find Lukas at Twin Scroll Marketing