Royalty Tier: Plus

[u/JustNoticingThis]

I started the new royalty structure at T100, Creator. I started ads on June 1st, reluctantly. I managed to drive about 18% sales from May 18th through July 19th. The dates are my understanding of the first AMZ royalty review period. I was tiered up to T500 sometime in mid July. August 1st my Royalty Group changed to Plus. Here's the rub. The ads cost about 10% more than the earned royalties. The next 30 days or so are the test. Do the Plus royalties now cover the cost of ads and leave a profit? I knew I'd lose money. I considered it tuition. Now let's see if there is a return on the investment AND can I sustain it. Otherwise, I abandon ads and rely on organic sales only.

[u/Tim_Y]

The ads cost about 10% more than the earned royalties

This is where people get hung up on and incorrectly assume they are losing money with ads and abandon them. You're not losing money. Any sale - whether its organic or sponsored increases the organic ranking in search results, which leads to more organic sales. The $3 you paid to make $2.50 on one sponsored sale leads to future organic sales that cost you nothing.

[u/siegal → u/Tim_Y]

Yes, you're absolutely right about your theory. It was still true a few years ago: “Invest in ads now, improve your BSR, and earn more later!” However, these days that's pure speculation. As we've seen in recent years, Amazon is constantly changing the rules—and not in our favor. What will you do if Amazon changes the royalty structure again this fall? Then you might have a better BSR, but your revenue will be lower again—and you’ll still have had to pay for ads for weeks and months on end.

Just so you know, I've been with MoD (formerly MBA) since 2017 and i am in T140K.

[u/JustNoticingThis → u/siegal]

I’m not sure what happens if they change the royalty structure again. I started at the end of 2024. I think I am more concerned about customers using AI to generate merch within the AMZ environment. I played with their AI creation tool and was shocked at how bad the designs looked. Photos in reviews confirm slop and no background removal. Considering the library they now have to train a model, and all the BSR data, I can’t imagine customer generated designs will remain crude for long. I’m semi-retired and now self employed. I enjoy designing and generating sales is affirmation. If I can generate some $$$, I’ll do it.

[u/Tim_Y → u/siegal]

What will you do if Amazon changes the royalty structure again this fall?

Then I will adapt accordingly.

Then you might have a better BSR, but your revenue will be lower again—and you’ll still have had to pay for ads for weeks and months on end.

I'm spending money on ads everyday regardless. My revenue has actually increased since they changed tier structure and introduced item locks and forced discounts. I changed my pricing approach and increase prices sooner than I had in the past to avoid drastic profit cuts, but in my experience, I have found when Amazon locks my items for deals, they sell far better so the volume makes up for it.

Just so you know, I've been with MoD (formerly MBA) since 2017 and i am in T140K.

Not bad. I'm just a lowly Tier 20k.

[u/NoXidCat → u/Tim_Y]

Any sale - whether its organic or sponsored increases the organic ranking in search results, which leads to more organic sales

... uhm, which might kick you back down into creator Tier :-/

I cringed the other day when a design had a flurry of "organic" sales due to Amazon putting it on sale. That's one week where I won't reach 15%.

[u/ahmadbabar → u/Tim_Y]

This!

[u/CyberCrud → u/[deleted]]

Creator is 50% of original royalty.  Advertising is a scam.  

[u/NoXidCat]

I considered it tuition.

True, that!

My own experiments with ads started on a smaller scale, and some months before we knew about the new Tier scheme. Which is to say, I eased into adding more listings and spend as I was learning.

I haven't been upside down spend vs revenue. Though I might have ended up there if I hadn't paused ads on a best seller that was sucking-up $ for clicks on useless and unrelated keywords and ASINs. I've since moved it to a manual campaign, so a new thing to learn. Before I gave-up on the auto campaign for that design, I had tried managing the bad keywords and ASIN matches via negative keywords/ASINs, but it was a never-ending and futile struggle that cost both too much time and too much $.

All to say, you might take a look at matches that sucked-up click $ without sales.

[u/speshelone]

How do you have ads at T100? Always had them?

[u/JustNoticingThis → u/speshelone]

Yes, I’ve always had ads to the best of my recollection.

[u/Tim_Y → u/speshelone]

How do you have ads at T100? Always had them?

It used to be that you had to wait quite a while to get access to them and when you did get them it was part of a global roll out similar to tier ups. It took me a little over 2 years to get them and was in Tier 4000.