Is Amazon Advertising Fee Worth It? A Data-Driven Breakdown

Amazon advertising can be a powerful tool to get the best from opportunities Amazon is offering as a top ecommerce platform. With competition getting tough as millions of shoppers are searching for products everyday, advertising becomes a main tool to stand out. But with constant costs rise and competition, many sellers wonder if what they are paying as Amazon advertising fee is really worth it?

There is no clear answer to this without understanding how Amazon advertising fees work, what factors drive those costs, and how they connect to actual business performance. Only looking at ad spend can be misleading.

In this article, we break down the Amazon advertising fee using real metrics and practical examples. This will help you decide if the Amazon fee you are paying is worth it for your business or not.

How Amazon Advertising Fees Are Calculated

Amazon advertising fees are calculated using a pay-per-click (PPC) model This tells you how much an advertiser pays every time a potential buyer clicks on their ad. For example, if you run a campaign and your ad gets clicked 10 times at a $1 CPC, your cost is $10. 

CPC costs on  Amazon can vary depending on various factors. For example it is heavily dependent on competition level. Greater competition will lead to higher CPCs because you are bidding against other sellers to win the best spot for your ad in front of searching customers. 

According to Seller Metrics, As of 2025, the average cost-per-click (CPC) for Amazon ads falls within the range of $0.71 to $1.20, depending on product category and competition. 

Depending on the product category you can expect $0.20–$0.50 in low‑competition niches, $0.60–$1.00 in mid‑tier, and $1.20–$2.00+ in high‑competition categories. While these costs may seem high at first, evaluating them against your product’s revenue and profit margins puts the spend into proper perspective.

Paying even a small amount for Amazon advertising can help increase the amount of revenue you receive at a much greater rate. 

Average Costs by Amazon Ad Type

Understanding the average cost associated with different Amazon ad types is crucial to determine if the fee is worth it.

Sponsored Product Ads

Sponsored Products are one of the most popular ads in Amazon advertising. The average cost-per-click (CPC) for Sponsored Product ads is around $0.80 to $1.30. This can vary significantly based on product category, competition, and seasonality.

For a moderate-sized Amazon ads campaign, you can allocate ad spend between $500 and $2,000 per month. High-competition categories may require larger budgets.

Sponsored Brand Ads

Sponsored Brand ads are designed to promote a brand and its product portfolio, appearing prominently at the top of search results. Because of their high brand building potential, sponsored brand ads’ average CPC typically ranges from $1.50 to $2.50. If you’re running Sponsored brand ads, you can expect your monthly budget to range from $1,000 to $5000, depending on the product category and campaign goals.

Sponsored Display Ads

Sponsored Display ads allow you to retarget customers who have viewed your products or similar products. The average Amazon display ads CPC is around $0.70 to $2.00, while the CPM (cost per thousand impressions) ranges from $4.00 to $12.00.

5 Factors That Influence Cost in Amazon Advertising

Amazon advertising costs differ based on market conditions and campaign strategy. Several factors directly influence how your total Amazon advertising fee adds up. Understanding these factors helps you control costs and spend smartly.

1. Product Category Competition

Highly competitive categories drive higher advertising costs. When many sellers bid on the same keywords, the cost per click increases. 

For example, a competitive keyword like “protein powder” may cost $2.50 per click, while a more specific keyword like “organic oat milk powder” might cost under $1.00 for the same click volume. High competition means higher Amazon advertising fee.

2. Seasonal Variations

Advertising costs rise during high-demand periods when more sellers compete for visibility. Search volumes can rise by up to 30% during key seasons which pushes the costs higher. A keyword like “Christmas decorations” costing $1.00 per click during off-season may increase to $1.40 or more during Q4 as brands raise bids to capture seasonal demand.

3. Bidding Strategy Impact

Amazon offers both manual and automated bidding. Each type affects CPC differently. Automated bidding adjusts bids using Amazon algorithm, which can sometimes increase CPC unexpectedly. Manual bidding gives you direct control over costs and is often the better option for keeping advertising under control.

4. Ad Placement Options

Research suggests that 70% of Amazon visitors never click past the first page of results and 35% of Amazon shoppers click on the first product on the search page. Advertisers have to pay more for space at the top of search results. 

While these placements offer strong visibility, they also increase Amazon advertising fees. Amazon states that ads in premium placements receive 2x higher click  through rates as opposed to those in lower positions.

5. The Product Price

Product price has a direct impact on CPC. Sellers usually decide how much they can pay for a click based on how much revenue a product generates. This is why higher-priced products can afford higher CPCs than lower-priced ones. For example a seller may afford a $2.00 CPC for a $60 product, but the same CPC would be too high for a $15 product and would reduce profitability.

How to Know if Amazon Ads are Right for Your Brand

Deciding whether Amazon Ads are right for your brand requires a clear understanding of your business goals, target audience, and resources. Here’s a breakdown of key considerations:

Your Business Model and Product Relevance

Amazon is ideal for products with proven demand. For example, everyday products like kitchen tools usually perform better with ads than seasonal items with limited demand. If customers are actively searching for your product category on Amazon, ads can boost visibility. 

However, if demand is low or inconsistent, advertising may increase costs without delivering meaningful returns.

Your Target Audience’s Presence on Amazon

Amazon Ads are effective only if your ideal customers are already shopping on the platform. Amazon attracts high-intent shoppers who are ready to buy. If your target market doesn’t actively shop on the platform, ad investments may not deliver desired results. 

You can use tools like Amazon’s Brand Analytics to gain insights to determine if your audience overlaps with Amazon’s shoppers. 

If Brand Analytics shows high search volume for keywords related to your product, it indicates strong audience presence. If search volume is low or unrelated terms dominate, investing on advertising may not be a smart choice.

Advertising Budget and Resources

Running Amazon Ads requires ongoing spending from initial investment to ongoing optimization. Most sellers reinvest a part of their revenue into Amazon advertising depending on category competition. A brand generating $20,000 in monthly sales may need $1,000–$3,000 in ad spend to compete effectively and maintain visibility.

Average Amazon Advertising Fee: What Sellers Typically Pay

As Amazon advertising works on a pay-per-click model, there is no fixed fee. On average, businesses spend $50 – $3,000 per month on Amazon ads depending on business size.

According to the WebFX study, 50% of startups and micro-enterprises spend $151–$350 per month, while 45% of small businesses invest $751–$1,500 monthly. Mid-sized businesses most commonly fall within the $151–$1,500 range, balancing scale and efficiency. At the higher end, 58% of enterprise businesses spend $351–$5,000 per month, reflecting their need for visibility in competitive categories. 

This data highlights that Amazon advertising fees scale with business size rather than following a single standard cost.

How AMZDUDES Makes Every Penny Worth It for Amazon Advertising? Case Study

AMZDUDES has successfully managed numerous campaigns that illustrate the effectiveness of Amazon advertising. Here’s one notable case.

Challenges

A bath and body brand had good products, but their Amazon store was not set up the right way. They were facing multiple issues among which the most prominent one was ads blockage,  ads were getting blocked, their listings were messy, and Amazon ads made only one sale in a whole week.
They were not getting any new customers, New-to-Brand was 0%, and most sales came only from people who already knew the brand.

Strategy

AMZDUDES fixed the ad problems, cleaned up the listings, and connected all product variations.
We improved the titles, images, and keywords so customers could find and trust the products.
Then we ran Amazon ads that showed the products to new shoppers, not just people searching for the brand.

Results (6 Weeks)

• Sales: $3,392 → $46,712
• Units sold: 195 → 2,203
• New customers: 0% → 66%
• Ad cost (ACOS): 33.66% → 17.67%
• Amazon ad sales: $12 → $23,746

Amazon went from weak and slow to a strong, steady sales channel that brings in new buyers and makes more profit.

These cases highlight how smart ad sending can boost your Amazon sales while controlling costs effectively.

Conclusion

Amazon advertising fees can be expensive but they deliver value that is unmatched. However it all depends on how effectively your campaigns are managed. It remains a powerful tool and investing in it is worth it as ads allow you to push your products forward and have them seen by exactly the kind of people who would be interested in buying them. However success depends on measuring the costs against actual performance metrics rather than focusing on ad spend alone.

And if you want to make the most out of Amazon ads, don’t hesitate to contact Amzdudes, a trusted Amazon growth agency focused on data-driven results.

FAQs

1. How much does Amazon charge for advertising?

Amazon advertising pricing varies based on several factors, including the type of ad, your bid strategy, and the competition for your targeted terms. The average cost of sponsored ads on Amazon can be around $0.97.

2. Is Amazon advertising worth it for small businesses?

Yes, if campaigns are structured properly. Many small businesses successfully advertise by tightly controlling bids and targeting high-intent keywords.

3. What is a good ACoS for Amazon ads?

A “good” ACoS depends on your margins and goals, but many sellers aim for 20%–30% for profitability-focused campaigns.

4. Why do Amazon advertising costs increase over time?

Costs rise due to higher competition, seasonal demand, and aggressive bidding without regular optimization.

How much budget should I start with for Amazon ads?

Most sellers start by allocating 5%–15% of monthly revenue to advertising and adjust based on performance.