First let's answer a couple of key questions.
Q – Do I need to advertise on Amazon?
A – Absolutely YES if you want to grow and scale your brand.
Q – How much do I have to spend on advertising?
A – Similar to any trade spend at retail a strong budget is 12-15% of total sales on Amazon or as digital marketers now like to call it TACOS (Total Advertising Cost of Sales). This is your total sales not just the sales attributed to the advertising.
Now let’s answer the main question, should and can I do this in-house, or should I use a third party?
If your brand is over $10,000,000 in sales on Amazon, yes you should have an in-house team for all paid media. Also, congrats because that is impressive!
If your brand is under $500,000 you should experiment yourself and use an AI tool to manage the day to day unless you have the bandwidth to be in the platform daily.
That leaves us the range of $500K – $10M on Amazon. If you fall in this bucket, you have a lot going on and don’t have the resources to manage Amazon advertising. A good paid media specialist is going to cost you around $90-$100K annually (70K base + benes/perks), not taking into account recruiting, hiring, and on-boarding. At 2 million in sales, a good third party is going to cost you around $78,000 ($1,500 per month retainer and 3% of sales). You want to try to find a partner that bills on the sales they generate and not total sales because that gives them some, “skin in the game”, incentive.
But it’s not all dollars and cents. Until recently in my career I kept asking well what’s the tipping point when to leave a third party and go in-house? The easy answer is when external cost exceeds internal cost – right? This was my mindset until I met a great team whose founder gave it to me succinctly – with an Amazon advertising service provider you will often get multiple people on the account (more brains, better output), they will have experience in multiple disciplines and products, won’t get sick, go on vacation, don’t need bonuses, and you may cycle through several team members before you find the right one.
Bottom line, I’m not saying don’t hire a team member for your paid media but consider that this is a special skill, and your internal resources may be better served elsewhere. If you are looking for a great third-party team, please check out https://www.amz-ads.com/. I have used them exclusively for the past few years and they are out of Austria, so they have international experience too.