Why Do Some Amazon PPC Agencies Charge a Percentage of Ad Spend?

When Amazon sellers are shopping around for PPC management, one of the biggest factors in their decision is the pricing model.

Amazon agencies using some form of “percentage of ad spend” model has become more and more common, but this tends to leave sellers wondering…

Why do some Amazon ppc agencies charge a percentage of ad spend?

Agencies use this model for a variety of reasons. Entourage Management Services, for example, uses a percentage of ad spend model because:

• It makes it easy for clients to know what their bill is going to be
• It is a fair way to ensure the amount charged typically corresponds to the amount of work that has to be done (accounts with higher spend are usually more advanced and require more man-hours)
• It removes the need to focus on billing concerns so everyone can focus their efforts and attention on working to scale the brand.

Using Entourage’s Amazon advertising management service as an example, you can see that clients can easily know every month what their bill is going to be without having to worry about unexpected fees or haggling.

Doesn’t a percent of ad spend model incentivize the agency to spend more money (even if it doesn’t make me more money)?

When considering working with an agency that works based off of a percentage of ad spend, many sellers are concerned about the agency “jacking up” ad spend just so that they make more money.

While some agencies do this, those agencies don’t hold onto clients for very long.

Account Managers at Entourage Management Services, for example, maintain clear outlines of client budgets and goals. These are discussed on regular meetings with clients to ensure everyone is on the same page.

The goal of Entourage Management Services is always to work with brands over an extended period of time. Overspending or ignoring a client’s budget would be a surefire way to ensure our relationship ends prematurely. It isn’t in anyone’s interest to go beyond a client’s stated budget.

How can I tell if I can trust an agency that charges a percentage of ad spend?

Before outsourcing your Amazon advertising, consider asking these 4 questions.

Once you’ve decided that working with an Amazon PPC agency is for you, the best way you can figure out if they are the right fit for your needs is to schedule at least one exploratory call.

Exploratory calls are a great way to ask questions and to discuss your brand’s unique needs.

On these calls, pay attention to things like:

• Is the representative answering your specific questions, or just the questions they think you’re asking?
• Are you being given feedback based on your specific situation and needs, or generic “broad strokes” information?
• Does everyone involved truly understand the Amazon landscape?

Any agency hoping to take on the responsibility of managing your advertising should be willing to do an unlimited number of exploratory calls with you.

Entourage: Software to Scale Amazon Ads and Results Driven Management.