Amazon has a campaign-level setting called the bidding strategy. It sounds small, but it changes how much control you give Amazon over your bids.
There are three options:
- Dynamic bids — down only
- Dynamic bids — up and down
- Fixed bids
One of them is usually the best long-term default. One of them almost always drives ACoS too high. And one of them is the fix many brands do not realize they need when a new product campaign is active but barely spending.
The important thing to understand is that bidding strategies do not set your actual keyword bid.
Your keyword bid is still a separate number you set inside the ad group. For example, you might set a bid of $1.50 on a keyword. The bidding strategy tells Amazon whether it is allowed to adjust that bid during the auction based on whether Amazon thinks that specific click is likely to convert.
So the setting is not asking, “How much do you want to bid?”
It is asking, “How much authority do you want to give Amazon to adjust your bid?”
That is the whole point of this setting. Amazon’s own Sponsored Products help documentation explains that advertisers choose between dynamic, fixed, and rule-based bidding strategies for Sponsored Products campaigns. You can read Amazon’s overview here: Amazon Ads Support Center: bidding strategies for Sponsored Products.
What Amazon Bidding Strategies Actually Control
Amazon Sponsored Products ads do not work like a simple fixed-price ad system where you set a bid and Amazon always uses that exact number.
For each auction, Amazon evaluates a lot of signals. It looks at things like the shopper’s search, the product, the keyword, the placement, the likelihood of a sale, and how relevant Amazon thinks your ad is.
Then, depending on your bidding strategy, Amazon may adjust your bid.
That means two campaigns with the same $1.50 keyword bid can behave very differently if one is set to down only, one is set to up and down, and one is set to fixed bids.
Here is the simple version:
- Dynamic bids — down only: Amazon can lower your bid if it thinks the click is unlikely to convert.
- Dynamic bids — up and down: Amazon can raise your bid if it thinks the click is likely to convert and lower it if it thinks the click is unlikely to convert.
- Fixed bids: Amazon does not adjust your bid.
Most brands should use down only as the default long-term setting. Fixed bids are useful in specific situations where you need to force visibility. Up and down is almost never the right call.
Amazon Bidding Strategy Comparison
| Bidding Strategy | What Amazon Can Do | Best Use Case | Main Risk |
|---|---|---|---|
| Dynamic bids — down only | Lower your bid when it thinks conversion is unlikely | Default long-term setting for most established campaigns | Can be too conservative for new products |
| Dynamic bids — up and down | Raise your bid when conversion seems likely and lower it when conversion seems unlikely | Rare cases where sales volume matters more than efficiency | Often drives ACoS too high |
| Fixed bids | Does not adjust your bid | New product launches or campaigns that need forced visibility | Can waste spend if left on too long |
This is the simplest way to think about the setting: down only protects efficiency, fixed bids force visibility, and up and down usually gives Amazon too much control.
Dynamic Bids — Down Only
Dynamic bids down only is the most popular option, and most of the time it is the best.
With down only, Amazon has permission to lower your bid when it thinks a conversion is unlikely. But Amazon does not have permission to raise your bid.
It only moves in one direction.
That makes down only useful because it can help filter out bad clicks.
For example, let’s say you set a $1.50 bid on a keyword. If Amazon looks at a particular auction and decides that click is unlikely to turn into a sale, it can lower your bid significantly. In some cases, it can lower the bid close to zero.
That means one of two things happens:
- You pay less for that click.
- Or you do not compete for that click at all.
Over time, that usually leads to lower average cost per click and lower ACoS.
That is why down only is usually the default setting I would recommend for most ongoing campaigns. It lets Amazon make conservative adjustments without giving Amazon permission to get aggressive with your money.
It is not perfect, though.
There is one big tradeoff, and it matters most when you are launching a new product.
Why Down Only Usually Works Best Long-Term
Down only is usually the safest long-term bidding strategy because it lets Amazon reduce waste without increasing bids beyond what you chose.
This matters because Amazon is pretty good at identifying some low-conversion situations.
Not perfect. But good enough that letting it lower bids can be helpful.
If a click looks weak, Amazon can pull the bid down. If the click looks strong, Amazon still has to respect your original bid. That gives you some algorithmic help without letting Amazon push costs higher.
That is why down only tends to be the best default for campaigns that already have some sales history and are not struggling to spend.
For an established product, this is usually where you want to end up:
- Set your bids intentionally.
- Use down only.
- Monitor performance.
- Adjust bids based on ACoS, spend, sales, and keyword-level results.
- Let Amazon trim some inefficient auctions in the background.
That is a good setup for a lot of brands.
But down only can cause problems when Amazon does not yet know whether your product converts.
Dynamic Bids — Up and Down
Dynamic bids up and down sounds appealing on paper.
With this setting, Amazon can raise your bid when it thinks a conversion is more likely. It can also lower your bid when it thinks a conversion is unlikely.
So at first glance, it sounds like Amazon is saying:
“We’ll bid more when the click is good and less when the click is bad.”
That sounds great.
The problem is that, in practice, this setting usually drives ACoS too high.
Amazon promotes this strategy quite a bit. For a while, Amazon had language during campaign creation suggesting that up and down could lead to more conversions at a lower cost per conversion.
The issue is that people who actually manage these campaigns have generally not seen that hold up.
A BidX study looked at roughly 10,000 campaigns and compared the three bidding strategies. Up and down did produce a conversion rate about 10% higher than down only. But it also came with about a 50% worse ACoS. Here is the study for reference: BidX case study on Amazon dynamic bidding strategies.
That is the key tradeoff.
You may get more conversions, but the additional sales can cost way too much.
That matches what I have seen in practice. It also matches what most people who have tested this in depth have found.
The data just does not support using up and down in almost every situation.
Why Up and Down Usually Performs Poorly
The problem with up and down is not that Amazon is incapable of identifying some higher-converting opportunities.
The problem is that Amazon’s incentives are not the same as yours.
Amazon wants more ad spend and more sales volume. You want profitable sales.
Those are related, but they are not the same.
If Amazon raises your bid because it thinks a conversion is more likely, that does not automatically mean the click will be profitable. It may just mean Amazon is willing to spend more of your money to win a more expensive auction.
That can create a situation where:
- Sales go up slightly.
- Conversion rate improves.
- CPC goes up.
- ACoS gets worse.
- Profitability drops.
That is why up and down can look appealing if you only look at conversion rate or total sales. But once you look at ACoS and profitability, it usually falls apart.
Theoretically, there may be a situation where a very high-budget campaign is trying to maximize sales volume and does not care much about efficiency.
For example, maybe a brand is doing a very aggressive launch or rank push and is willing to accept inefficient ad spend for a short period of time.
Even then, I usually do not find up and down to be the best way to do that. In my experience, it often just wastes more money and gives you the same results you could have gotten with down only or fixed bids, depending on the goal.
So my general advice is simple:
- Do not use up and down as your default.
- In most cases, do not use it at all.
Fixed Bids
Fixed bids means Amazon does not adjust your bid.
Whatever bid you set is the bid Amazon uses for the auction.
If you set a keyword bid at $1.50, then Amazon is not lowering that bid because it thinks the click is unlikely to convert. It is also not raising that bid because it thinks the click is likely to convert.
You have full control.
This is not usually the best long-term setting for most campaigns because you lose the efficiency benefit of Amazon lowering bids on lower-conversion auctions.
And Amazon actually does that part pretty well.
But fixed bids are very useful in one specific type of situation:
When you need to force Amazon to show your product more than Amazon wants to show it.
That happens a lot with new product launches.
The New Product Problem
When you launch a new product on Amazon, Amazon does not have much sales history for that product.
There is no strong signal yet that shoppers search for this type of product, click on your listing, and buy it. New products also usually do not convert as well as established products.
That means Amazon may look at your product and decide that conversion is unlikely.
If your campaign is set to dynamic bids down only, Amazon is allowed to lower your bids in the background. And because the product has little or no sales history, Amazon may be very conservative.
Sometimes it lowers the bids so much that your ads barely show.
So you end up in a frustrating situation:
- You launch the product.
- You create the campaigns.
- You set the bids.
- Everything looks active.
- But almost nothing happens.
The campaign barely spends. You are not getting enough impressions. You are not getting enough clicks. You are not getting the visibility you expected.
A lot of sellers then assume something is broken.
But sometimes the issue is simply that down only is doing exactly what it is supposed to do. Amazon thinks the product is unlikely to convert, so it lowers your bids.
The problem is that, during a launch, you may not want Amazon to be conservative.
You may want the opposite.
You may want Amazon to show the product, get clicks, and start collecting data.
This is also why the broader Amazon launch timeline matters. New products usually need enough time to get set up, go live, gather data, and stabilize. For more context on that early launch period, see this related Five Star Commerce article: what the first 3 months on Amazon actually look like.
The Fix: Use Fixed Bids Early
One practical fix is to use fixed bids for the first month or two after launching a new product.
This lets you force the platform to show the product more than it would under down only.
The goal is not to use fixed bids forever. The goal is to get enough visibility and enough early traffic that Amazon can start learning whether the product converts.
If your listing is in decent shape, the product is good, and the price makes sense, those early clicks can turn into early sales.
Those early sales matter because they help Amazon form a more accurate conversion estimate for the product.
Once the product has a few weeks of sales history behind it, you can usually switch the campaign back to down only. At that point, Amazon has more data, and the down only setting can start doing what you actually want it to do: trimming inefficient clicks and reducing wasted spend.
So the sequence often looks like this:
- Launch the product.
- Use fixed bids if down only is not getting enough visibility.
- Let the campaign force spend and collect early clicks.
- Get some sales history.
- After a month or two, switch back to down only.
- Fine-tune bids based on the actual data.
This is one of the most useful practical applications of fixed bids.
Recommended Launch-to-Optimization Bidding Flow
| Stage | Typical Timing | Suggested Bidding Strategy | Why |
|---|---|---|---|
| New product launch | Week 1 | Fixed bids | Helps force visibility when Amazon has no sales history yet |
| Early data collection | Weeks 2–4 | Fixed bids, if spend is still too low | Gives the product a chance to get clicks and early sales |
| Initial optimization | Month 2 | Consider switching to down only | Amazon now has more conversion data to work with |
| Long-term management | After launch period | Dynamic bids — down only | Lets Amazon trim inefficient clicks while you manage bids normally |
The point is not to use fixed bids forever. The point is to use fixed bids when Amazon is being too cautious, then move back to down only once the product has enough history for Amazon to make smarter decisions.
Fixed Bids Are Not Just for New Products
New product launches are the most common reason to use fixed bids, but they are not the only reason.
Fixed bids can also make sense any time you want to be extra aggressive and down only is not spending enough.
For example, you may have a situation where you intentionally want more visibility for a product, keyword, or campaign. Maybe you are trying to support a launch, push a specific product, defend branded searches, or get more traction in a campaign that is being too conservative.
In those situations, fixed bids can be a tool.
The key is to understand why you are using it.
Do not use fixed bids because it feels simpler. Use fixed bids when you specifically want to override Amazon’s caution.
That is the difference.
The Best Default Bidding Strategy
For most brands, the best general rule is:
Use down only as your default long-term setting.
Use fixed bids when you need to force visibility.
Avoid up and down in almost every situation.
That does not mean down only is perfect. It can be too conservative, especially for new products.
It also does not mean fixed bids are always better. Fixed bids can spend more aggressively because Amazon is not lowering your bids on weak auctions.
But as a framework, this is usually the cleanest way to think about it.
When to Use Dynamic Bids Down Only
Use dynamic bids down only when the campaign has enough history and is already getting visibility.
This is usually the best setting for:
- Established products
- Ongoing campaigns
- Campaigns where you care about ACoS
- Campaigns that already spend normally
- Campaigns where you want Amazon to reduce bids on weaker clicks
Down only is the closest thing to a default setting for most Amazon PPC campaigns.
It gives Amazon limited authority. Amazon can protect you from some low-conversion clicks, but it cannot raise your bid.
That is usually the balance you want.
When to Use Fixed Bids
Use fixed bids when Amazon is being too conservative and you need to force visibility.
This is usually most relevant for:
- New product launches
- Products with little or no sales history
- Campaigns that are active but barely spending
- Situations where down only is lowering bids too much
- Aggressive short-term pushes where visibility matters more than efficiency
The common example is a new product launch.
If you launch a product and the campaign is active but barely spending, fixed bids may be the missing piece. Amazon may be lowering your bids because it does not yet trust the product to convert.
Fixed bids remove that adjustment and force Amazon to use the bids you actually set.
Again, this is usually temporary. After a month or two, once the product has more data, you generally want to switch back to down only.
When to Use Dynamic Bids Up and Down
Almost never.
That is the honest answer.
Up and down can increase conversion rate, but it often does that by increasing costs too much. A higher conversion rate does not help if ACoS gets worse and the extra sales are not profitable.
The only possible exception would be a campaign where you care almost entirely about sales volume and are willing to accept a much higher ACoS.
Even then, I would be very cautious. In most situations where a brand wants to be aggressive, fixed bids or controlled bid increases are cleaner than giving Amazon permission to raise bids automatically.
A Simple Decision Framework
If you are not sure which bidding strategy to use, start here.
If the product is established
Use down only.
This is usually the best long-term setting because it helps reduce wasted spend without giving Amazon permission to increase your bids.
If the product is new and barely spending
Try fixed bids.
This is especially true if the campaign is active, the keywords are relevant, and the bids seem reasonable, but Amazon still is not giving you impressions or clicks.
In that situation, down only may be pulling your bids down because Amazon does not yet have enough confidence in the product.
If you are tempted to use up and down
Be careful.
Ask what you are actually trying to accomplish.
If you want more visibility, fixed bids may be better.
If you want long-term efficiency, down only is usually better.
If you want Amazon to spend more aggressively because it thinks a click might convert, understand that this often leads to higher ACoS.
Which Bidding Strategy Should You Use?
| Situation | Recommended Strategy |
|---|---|
| Established product with normal campaign spend | Dynamic bids — down only |
| Campaign has sales history and you care about ACoS | Dynamic bids — down only |
| New product campaign is active but barely spending | Fixed bids |
| Launch campaign needs more visibility | Fixed bids |
| You want to force Amazon to show the product more aggressively | Fixed bids |
| You are tempted to use up and down because Amazon recommends it | Usually avoid it |
| You care more about sales volume than efficiency | Possibly up and down, but test carefully |
| ACoS is already too high | Usually avoid up and down |
A good rule of thumb: if you are trying to improve efficiency, use down only. If you are trying to force visibility, use fixed bids. If you are considering up and down, have a very specific reason and watch ACoS closely.
Why This Setting Matters More Than Beginners Realize
A lot of beginners look at Amazon PPC and focus only on the keyword bid.
That makes sense. The keyword bid is obvious. You see the number, you adjust the number, and performance changes.
But the bidding strategy can quietly change how that number behaves.
A $1.50 bid is not always just a $1.50 bid.
- With down only, Amazon might lower it.
- With up and down, Amazon might raise or lower it.
- With fixed bids, Amazon leaves it alone.
So if your campaign is not behaving the way you expect, the bidding strategy is one of the first settings you should check.
This is especially true when a campaign is not spending.
If everything looks active but you are getting almost no visibility, do not only look at the keyword bids. Look at the bidding strategy too.
For brands that want help with PPC management, listing work, launch support, or ongoing Amazon account management, this is the type of work Five Star Commerce handles through its Amazon marketplace services: Five Star Commerce Amazon and marketplace services.
The Role of Conversion Likelihood
Amazon is constantly trying to estimate whether an ad click is likely to turn into a sale.
That estimate affects how Amazon treats your bid.
For an established product with sales history, reviews, and a decent conversion rate, Amazon has signals it can use. It can make more informed decisions about when to lower bids.
For a new product, Amazon has less information.
That does not mean the product is bad. It just means Amazon does not have proof yet.
This is why new products often struggle under down only. Amazon may assume conversion is unlikely and lower bids before the product has a real chance to perform.
That creates a chicken-and-egg problem:
- Amazon wants conversion data before giving you better visibility.
- But you need visibility to get clicks and sales.
Fixed bids can help break that loop.
They let you get the early traffic needed to start building the conversion history Amazon uses later.
Do Not Confuse Bidding Strategy With Relevance
Bidding strategy is only one part of Amazon PPC.
It controls what Amazon can do with your bid, but it is not the only factor that determines whether your ad shows or what you pay.
Another major factor is relevance.
Amazon still needs to decide whether your product is relevant to the search. If Amazon does not think your product is relevant, raising bids or switching bidding strategies may not fix the problem.
This is important because some sellers try to solve every PPC issue by increasing bids.
Sometimes the bid is the problem.
Sometimes the bidding strategy is the problem.
Sometimes the relevance is the problem.
And sometimes the listing itself is the problem.
If the product does not match the keyword, the listing is weak, the price is off, or the offer is not competitive, changing the bidding strategy will not magically make the campaign profitable.
Common Mistake: Using Up and Down Because Amazon Recommends It
One of the biggest mistakes is choosing up and down because Amazon makes it sound like the smarter option.
The wording can make it feel like Amazon is optimizing for you.
But you have to remember that Amazon is not managing your profit margin. Amazon does not know your full business economics. It does not know how much margin you need, how much cash you can burn, or whether the extra sale is actually worth it.
So when Amazon says it can raise your bid when conversion is more likely, that does not automatically mean you should let it.
In most real campaigns, up and down tends to make spend less efficient.
That is why I usually avoid it.
Common Mistake: Leaving Fixed Bids On Too Long
Fixed bids can be useful, but they can also become expensive if you leave them on too long.
The point of fixed bids is to force visibility when Amazon is being too conservative.
But once the campaign has enough data, you usually want Amazon to start filtering out weaker clicks again.
That is where down only becomes useful.
So if you use fixed bids for a launch, make sure you come back and review the campaign after a few weeks. Do not just leave it running forever because it started working.
A good general timing is the first month or two after launch. That gives the product time to collect some early clicks and sales. Then you can switch back to down only and start tightening performance.
Common Mistake: Assuming Low Spend Means Low Demand
If your new product campaign is barely spending, it does not always mean there is no demand.
It might mean Amazon is not giving the campaign enough visibility.
That can happen because of low initial conversion expectations, especially under down only.
Before assuming the product has no demand, check:
- Are the campaigns active?
- Are the keywords relevant?
- Are the bids competitive enough?
- Is the product eligible to advertise?
- Is the listing live and buyable?
- Is the campaign set to down only?
- Could Amazon be lowering the bids too much?
If the setup looks good but spend is still too low, fixed bids may be worth testing.
Common Mistake: Thinking Bidding Strategy Replaces Bid Management
The bidding strategy does not replace actual bid management.
You still need to look at performance and adjust bids.
Down only can help reduce waste, but it will not build a full PPC strategy for you. Fixed bids can force visibility, but they will not make bad keywords profitable. Up and down can increase bids automatically, but that does not mean those increases are good for your margins.
You still need to monitor:
- Spend
- Sales
- ACoS
- CPC
- Conversion rate
- Orders
- Impressions
- Click-through rate
- Keyword-level performance
- Search term performance
The bidding strategy is just one lever.
It is an important lever, but it is not the whole machine.
This is also why the right Amazon support model matters. If you are comparing whether to manage ads internally, hire an agency, or use a hybrid approach, these two Five Star Commerce articles may be useful: Should You Hire an Amazon Agency or Do It Yourself? and Which Amazon Agency Pricing Model Is Better for Clients?
My Practical Recommendation
For most brands, here is what I would do.
If I am launching a brand-new product and the campaigns are not getting enough visibility, I would consider starting with fixed bids. I would use that to force spend, get clicks, and start building sales history.
After the product has some traction, usually after a month or two, I would switch to down only.
Then I would manage the campaign more normally: review search terms, adjust bids, cut waste, and let Amazon lower bids when it thinks conversion is unlikely.
For established campaigns, I would usually use down only from the start.
For up and down, I would generally avoid it.
That simple approach prevents a lot of wasted spend and also solves one of the most common new product launch problems.
Quick Comparison: Down Only vs. Up and Down vs. Fixed
Dynamic bids — down only
- Amazon can lower your bid.
- Amazon cannot raise your bid.
- Usually best for long-term campaign efficiency.
- Often leads to lower CPCs and lower ACoS.
- Can be too conservative for new products.
- Best default setting for most campaigns.
Dynamic bids — up and down
- Amazon can raise your bid.
- Amazon can lower your bid.
- Sounds good in theory.
- Often drives ACoS too high.
- May increase conversion rate, but often at a cost that is not worth it.
- Almost never the setting I would recommend.
Fixed bids
- Amazon does not adjust your bid.
- You get full control.
- Useful when you need to force visibility.
- Helpful for new product launches when down only is not spending.
- Usually not the best long-term setting.
- Often used temporarily, then switched back to down only.
FAQ
What is the best Amazon bidding strategy?
For most ongoing Sponsored Products campaigns, dynamic bids down only is usually the best default. It lets Amazon lower bids when conversion is unlikely, but it does not let Amazon raise bids above what you set.
Should I use dynamic bids up and down?
Usually no. Up and down may increase conversion rate, but it often increases costs too much and drives ACoS higher. In most situations, down only or fixed bids are better choices.
When should I use fixed bids on Amazon?
Use fixed bids when you need to force visibility. The most common example is a new product launch where campaigns are active but barely spending because Amazon is lowering bids too much under down only.
How long should I use fixed bids for a new product launch?
A common approach is to use fixed bids for the first month or two after launch, especially if down only is not producing enough visibility. After the product has some sales history, switch back to down only and start optimizing for efficiency.
Does down only mean Amazon will always lower my bid?
No. It means Amazon is allowed to lower your bid when it thinks conversion is unlikely. It does not mean every bid will be lowered. It also means Amazon cannot raise your bid.
Why is my Amazon campaign active but not spending?
There are several possible reasons, but one common issue with new products is that down only may be lowering bids because Amazon does not yet believe the product is likely to convert. If everything else looks correct, fixed bids may help force more visibility.
Is fixed bids better than down only?
Not usually long-term. Fixed bids are better when you need control and visibility. Down only is usually better once the campaign has data and you want Amazon to help reduce inefficient clicks.
Does bidding strategy affect ACoS?
Yes. Bidding strategy can affect CPC, spend, conversion volume, and ACoS. Up and down often increases ACoS because Amazon can raise bids. Down only often helps keep ACoS lower because Amazon can only reduce bids, not increase them.
Final Takeaway
Amazon bidding strategies are not complicated once you understand what they actually control.
They do not set your keyword bid. They control whether Amazon can adjust that bid in the auction.
For most brands, the framework is simple:
- Use down only as your default long-term setting.
- Use fixed bids when you need to force visibility, especially for new product launches.
- Avoid up and down because it usually drives ACoS too high.
The biggest exception is the new product launch problem. If Amazon does not have sales history yet, down only can make the platform too conservative. In that case, fixed bids can help you get the early clicks and sales Amazon needs before switching back to down only.
The image below summarizes the basic framework: down only for long-term efficiency, fixed bids when you need more visibility, and up and down only in rare situations where you understand the ACoS risk.
If you want a walkthrough, the video above covers this step-by-step. If your situation is more complex and you want professional help applying this to your brand, reach out to us at customerservice@fivestarcommerce.com.
Image above: Quick comparison of the three Amazon PPC bidding strategies and when each one usually makes sense.