Managing Amazon PPC takes time—especially with all the different ad types like Sponsored Products, Sponsored Display, and Sponsored Brands, plus targeting options like manual, auto, and retargeting. Things get even more complicated when you’re adding new SKUs or launching products in different niches. That’s where tools like ours, SellerMetrics, come in. As a leader in the Amazon PPC automation software field, one feature we often get asked about is the Amazon suggested bid. It’s one of the first things sellers look at when launching a new campaign—and for good reason.
What is Amazon Suggested Bid?
When you create a new campaign or update an ad group, on the Targets tab there is a corresponding suggested bid, and a range will show up for the keyword.
Figure 1
Once you select the suggested bid option in the dropdown, it will change all your default bids to the suggested bid.
According to Amazon that makes the suggested bid, provides you with an estimate of the Amazon bids that have been used by other advertisers for products such as yours.”
It will be Amazon that makes the decision on what products are similar in your bid range estimation. The suggested bid of the keyword will fall within the suggested range. For example, a suggested bid for your keyword is $0.70 with a range of $0.40 and $1.40.
Why is there a Suggested Range?
Knowing that the suggested bid comes from advertisers (Amazon sellers) with similar products as yours, begs the following questions:
Who are the advertisers Amazon is basing this on?
What kind of ads make it into the suggested bid range?
What are the objectives of the advertisers?
Unfortunately, we cannot answer some of those questions in a matter-of-fact manner. Amazon PPC does not give us the exact formula and we can only speculate. Still, asking the above questions will help us understand the limitations of the suggested bid and use this data wisely.
The suggested bid range is based on the winning bids—that is, bids that actually won impressions for similar ads on that keyword. This information is given by Amazon Advertising themselves, so we know this with certainty. We can speculate that the similar ads will have similar correlating features such as:
Keywords
Category
Price
suggested bid range is the group of winning bids that won impression on the keyword with similar ads,
If you are selling a product that is not exactly the actual product itself, you can take the suggested bid with a grain of salt. For example the accessories of or an add-on of the main product.
People often wonder “Why is my Amazon PPC suggested bid so high?” That’s because the suggested range is influenced by successful bids, not just what people offer. Since higher bids often win more impressions, Amazon’s system naturally leans toward showing higher numbers. This can lead to overbidding if you’re not careful.
How Does Amazon Calculate PPC Suggested Bid?
Amazon doesn’t clearly explain how it comes up with the suggested bid—and that leaves many sellers wondering what’s really going on behind the scenes. In most cases, it looks like the suggested bid is just the average of the range shown. But sometimes, like with the keyword “white corner baby shelf mount,” the suggested bid hits the top end of the range—say $1.11—making you question the logic.
It could be that the system uses a weighted average, influenced by how many sellers bid at certain levels. Still, the trend seems clear: Amazon PPC suggested bids are usually biased upwards. Like below.
Still, it is quite obvious that Amazon wants you to bid higher than you would want to. The suggested bid seems to be biased upwards.
Our Experiment with the Amazon PPC Suggested Bid
So we ran a little experiment to see how reliable Amazon’s suggested bid really is. Now, Amazon says the suggested bid range comes from “winning bids on similar ads,” so in theory, just adding new ASIN/Ads to your ad group shouldn’t really change much, right?
Turns out, it does.
The moment we added new ASIN/Ads to the mix, the suggested bid shifted, as seen below:
One product added
Two product added
That got us thinking—maybe Amazon is factoring in more than just what other sellers are bidding. It feels like there’s an internal “quality score” Amazon assigns to your product bundle, and that plays a role in how the bid is calculated.
From what we noticed, it’s not just about other advertisers. It’s also about what you put into your ad group. That’s why sometimes the numbers seem off, and further prompts people to question why their Amazon PPC suggested bid is so high.
There’s a common theory floating around that Amazon’s suggested bid is somehow linked to your product’s conversion rate. For example:
Product
Conversion Rate
Winning Bid
Product A
20%
$1.25
Product B
18%
$1.45
Product C
10%
$1.87
Thus, do not use the suggested bid as a proxy of the relative conversion rate of your product vs your competitors. Amazon suggested bid is not a proxy for the marketplace conversion rate and bid relationship.
How Not to Use Amazon’s Suggested Bid
When you’re bidding on a large number of keywords—say, over 100—it’s best not to rely solely on Amazon’s suggested bid. Doing so can quickly drain your campaign budget, especially if you’re working with limited data. Instead, take a cautious approach: start with lower bids, particularly for keywords that haven’t yet proven themselves. This helps protect your budget and ensures you’re not overspending on terms that don’t bring in sales.
How to Use Amazon PPC Suggested Bid Effectively
The key is not to follow Amazon’s suggested bid blindly. Some bids may be far above your acceptable ACoS, which makes them a poor fit for your goals. Know your product margins and calculate your breakeven ACoS before setting any bids. This allows you to determine what you can spend to stay profitable. (Need help with this? Check out our full guide on Amazon PPC Optimization.
Here’s a final, important point: your historical campaign data—what we call implied data—is often more reliable than the suggested bid itself. Amazon PPC gives you this through the Amazon Advertising reporting function, by loading the search term and keywords report.
The most valuable metric here is your CPC (Cost per Click), which tells you what you’ve actually been paying to win clicks on specific keywords. Make sure that your bid is in line with this CPC metric, especially if you’re refining your Amazon PPC suggested bid strategy or trying to manage your suggested bid for low-competition keywords.
Conclusion
Amazon’s suggested bid can be a helpful starting point—especially for new sellers who don’t have historical data to reference. But once your campaigns are up and running, relying solely on suggested bids isn’t ideal. In fact, we believe it’s Amazon’s subtle way of nudging bids higher across the board, driving up the overall cost of advertising. If you have access to your own performance data, you’re much better off using that to guide your strategy. Dig into your reports, evaluate your CPC, and adjust your bids based on what aligns with your ACoS targets and overall campaign goals.
It’s basically Amazon’s way of giving you a bidding hint. When you set up a Sponsored Products campaign, Amazon shows you a recommended bid for each keyword—based on what other sellers with similar products are paying to get their ads seen. Think of it as a starting point, not a rule.
How does Amazon even come up with that number?
Amazon looks at past auction data—like how much others have paid to win impressions for similar keywords and products. Then it gives you a suggested bid, often somewhere in the middle of a bid range. It’s based on factors like keyword relevance, recent winning bids, and how competitive the space is.
Should I just go with the suggested bid?
Not always. While it’s helpful—especially if you’re launching something new—it doesn’t always match your goals or your ACoS target. Use it as a guide, but adjust based on your margins, product performance, and budget.
What’s the deal with the bid range vs. the suggested bid?
The bid range shows you the low and high ends of what others are bidding. The suggested bid is just the midpoint Amazon recommends. Both are useful for understanding how competitive a keyword is—but again, they’re just references.
Why does my suggested bid keep changing?
Because the market’s always changing. Competitor bids, seasonal demand, and keyword popularity can all cause your Amazon PPC suggested bid to go up or down. It’s pretty normal.
Can I bid less than what Amazon suggests?
Of course! You don’t have to follow it. In many cases you should ignore it! If you want to start low and test the waters, go for it. Just know that bidding too low might reduce your visibility—so keep an eye on impressions and clicks.
Is the suggested bid the same for every ad type?
No it is not. Suggested bids mainly show up in Sponsored Products. Sponsored Brands and Sponsored Display play by different rules, so don’t expect the same kind of bidding guidance there.
What if the suggested bid seems way too high?
That is quite often the case. If the number looks off, it might be because the keyword’s super competitive. Try improving your listing, going after long-tail keywords, or setting a lower bid manually to see what works for you. Don’t be afraid to tweak.
Where can I actually see these suggested bids?
You’ll find them in the Amazon Ads console when creating or editing a Sponsored Products campaign. Just enable manual targeting, and the suggestions will pop up next to your keyword list.
