Why Not to Base Number of Giveaway Units on Keyword Search Volume

Using search volume to determine the number of giveaway units needed to drive keyword ranking is an extremely flawed method.

A significant number of sellers are running promotions and giving away far too many units in promotions. When asked how they are determining the number of units they are giving away, many sellers site their keyword tool. As a result of these bloated suggestions, countless sellers are wasting thousands of dollars in extra inventory and advertising spend.

In this post, I’ll show you what’s wrong with using search volume. And then I’ll walk you through the current best strategies for determining the right number of units for a giveaway. After running over 30,000 product launches, we’ve learned a thing or two about what it takes to drive ranking, including how to best estimate number of giveaway units.

Two Major Flaws In Using Keyword Volume To Estimate Giveaway Units

Flaw #1: Conversion Rate

Remember that sales volume, not search volume, is the important metric for keyword ranking. If there are a hundred-zillion searches per month for a product but only 10 sales, you only need to drive enough sales to compete with those 10 purchases.  

Conversion rate from search to purchase can be drastic. We have access to some insider, Amazon data, and what it shows is that for some keywords, the percentage of searches that result in a sale can be as high as 50% and as low as 0.01%.

Talk about a drastic difference! That means if a keyword gets 10,000 searches per month, there could be anywhere from 5,000 sales to 10 sales.

There’s no way around this huge variation in conversion rate. What if you took an average? Let’s call the middle a 25% conversion rate. That would mean 25% of 10,000 searches are sales. So monthly sales would be 2,500. But 2,500 giveaway units isn’t going to do much if the keyword is actually converting at 50%. That would mean sales were actually 5,000.

On the other hand, it would be extremely excessive to give 2,500 units if the conversion rate was only 0.01%. In that case, you would have only needed 10 sales. But instead you threw away inventory.

As you can see, without an understanding of conversion rate, estimating giveaway units using search volume is very misleading.

Flaw #2: Sales Distribution

The second major flaw in determining number of giveaway units from search volume is the distribution of sales across search results. Sales distribution can be summed up with this simple question: what percentage of shoppers who run a search, purchase the #1 ranking product? What about the #5 ranking product? The #15?

If 100% of shoppers who search a keyword end up purchasing the #1 ranking product, sales distribution would be low. Actually, in the case of 100%, the distribution would be 0.

If 10% of customers purchased the #1 ranking product, another 10% purchased the #2 ranking product, and so on, the distribution would be higher and would look like this.

So what is the likelihood that sales distribution is consistent for most keyword searches on Amazon?

If you search, “AA batteries,” you don’t have to scroll very far before you find what you’re looking for. The products are all generally the same with minimal difference other than price and quantity.

Conversely, when shopping for, “father’s day gift” or “baby bandana bib,” style and preference are important considerations for shoppers. Prospective customers are much more likely to browse the results, ultimately purchasing the style, bundle, or color they like most.

Now that you understand what sales distribution is and how it can vary wildly, you can begin to see the second flaw in using search volume to estimate number of giveaway units. Keyword tools do not consider sales distribution. In fact, they don’t have any information about sales distribution at all.

And that’s a problem for you as you determine the optimal number of giveaway units for your launch. Sales distribution plays a critical role in the number of sales your product needs to outrank the competition.

For example, let’s say 80% of the sales for a keyword search are split between the top 5 products. If your goal is just to land in the top 15, then you don’t actually need to compete with those top 5 products. You only need to match the other 20% of the sales for that keyword.

If you did want to land in the top 5 for that keyword, you would need to match the sales of those top 5 competitors. That would mean giving away enough product per day to match 80% of the sales for that search term.

Now let’s look at conversion rate and sales distribution together. Say conversion rate is 2.5% for that keyword with 100,000 searches. That’s 2,500 monthly sales. And if 80% of sales are distributed among the top 5 listings, that means 2,000 monthly sales are going to those top 5 sellers.

So if you want to land in position 6 – 15, you only need to compete with the remaining 500 monthly sales. If we assume that sales distribution between products 6 – 15 is even, we can estimate that each product has about 50 sales per month. Divide that by 30 days in a month, and you’ve got about 2 sales per day, or 2 units a day that you need to give away in your launch. 

As you can see, estimating the number of giveaway units needed to be sold per day to match competitors is highly dependant on the conversion rate AND the sales distribution across the results. Both of these numbers are currently unknown to existing tools and can vary significantly across searches. These factors are what make keyword tool calculations a shot in the dark at best when it comes to giveaway unit recommendations.

How to Estimate the Number of Giveaway Units

First, let’s talk about how a launch works. The idea of a launch is to match or exceed the number of sales for listings on page one for your targeted keyword in a short amount of time. We recommend 7 days, as Amazon recognizes sales history in 7-day buckets.

In order to sell a large number of units in only a few days, you’ll likely need to use a giveaway platform. But how do you determine the number of giveaway units you need to match or exceed the monthly sales of your competition?

Unfortunately, there is no simple or straightforward answer for you just yet. We will, however, share the processes we have used here at Viral Launch to estimate the number of units to give for tens of thousands of launches over the last few years. We guarantee that this approach is far better than using search volume to estimate the number of giveaway units you need for a successful launch.

Step 1: Know Your Keywords

First and foremost, knowing your main keyword is critical to a successful Amazon business. Using an Amazon keyword tool such as Keyword Research, allows you to identify your product’s most relevant words. A good tool will help you prioritize by showing you search volume and relevancy for each keyword. We call that our Priority Score.

Step 2: Determine Your Budget

Your budget for your promotional campaign is an important factor in determining which keyword you should target. The higher the sales volume, the more units you will need to rank alongside the page one performers. If your budget is big, go for a keyword that gets a lot of sales. If your budget is smaller, go for a keyword with fewer sales.

Step 3: Determine Monthly Sales Volume for Your Keyword

Once you have selected the keyword you’re going to target based on your budget, search volume, and relevance to your listing, you need to determine the number of giveaway units to get ranking on page one.

Use a sales volume estimation tool like Market Intelligence to determine the number of sales your page one competitors are doing each month. This will allow you to see the sales volume you need to match or exceed over at least a seven day period.

A simple way to do the math is to take an average of sales for listings on page one you are looking to rank alongside. Let’s say you are looking to rank in the top 5 positions for your keyword and the average sellers are selling 3,000 units per month (100 units per day).

From your keyword research in Step #1, you should have a good feel for your market’s most popular keywords. Let’s say there are 2 high volume keywords, each highly relevant to your product market.

We would suggest giving away at 50% of the average sales volume. So 1,500 units per month or (1,500 / 30 days = 50 units per day) 50 units per day.

Multiply that by a minimum of 7 days of promotions to equal a suggested giveaway of 350 units. 

We understand that the math is not perfect. There are potentially hundreds of words these top performing products are generating sales through, including PPC, outside traffic, etc. We are working hard to develop a solution for better determining the number of sales per keyword as well. However, until we have this more granular data, we are relying on this tried and true method of determining the number of units to sell from a solid metric, sales volume.

The Takeaway

Now that you understand the technique behind creating a giveaway strategy based on sales volume, NOT search volume, you can apply some of these techniques to your promotions. No matter what traffic source you’re using (i.e. discounted promotions, Amazon Sponsored Ads, or Facebook promotions) to reach page one, you need to match or exceed the average number of sales for your targeted keyword.

Basing these giveaway estimates on search volume alone could cost you tens of thousands of extra dollars and cut into the bottom line of your business. Take advantage of the advice and knowledge of the true Amazon experts at Viral Launch and make sure your next promotion sets you up for success.

LAUNCH YOUR PRODUCT

9 Common Launch Mistakes to Avoid

What is the key to success on Amazon? It’s a pretty simple process when you break it down: source a great product, set up a listing to convert, and get in front of shoppers. Here at Viral Launch, it’s our goal to help you succeed every step of the way. To get your product in front of shoppers, one service we offer is called product launches, which increase your visibility on Amazon and put you in a position to sell.

We run over 200 launches each day, and we’ve seen some awesome successes and some unfortunate failures. To help you learn from past mistakes, we’ll share 9 common launch mistakes to avoid when running a promotion with Viral Launch.

Watch our How to Launch course to set yourself up for success.

 

What is a Product Launch?

When it comes to achieving rank on Amazon, sales are king. With Viral Launch promotions, we drive sales to your listing through product giveaways. We do this to promote brand awareness, which passively increases keyword ranking. For a launching period of up to 12 days, a seller will give a number of discounted units, typically for 85-95% off, targeting a specific keyword. As these sales are attributed to the keyword, the listing will move up the ranks. The goal is to reach page one, increase the product’s visibility to shoppers, and ultimately increase organic sales!

One-time-use coupon codes, coupled with a Max Order Qty. of 1 allow buyers to purchase one unit at the discounted price. At a pre-determined launch time, the product goes up on our buyer site, where everyday Amazon shoppers grab their favorite coupon for the day. The shopper is sent to your product on Amazon and purchases with his or her coupon.

The launch results typically take a couple of days to take effect, but you should start to see a change in rank anywhere from day three to day seven of the launch. Once you’re ranking, after the promotion is completed, it’s up to the listing and reviews to convert well to maintain rank. If you’ve got a fully optimized listing with great photos, a great price, and a competitive number of reviews, you’ll be in the perfect position to outsell your competition – woohoo!

Check out our Amazon How to Launch course, which will walk you through how to set up a launch step-by-step.

 

9 Most Common Launch Mistakes

We’ve run over 14,000 launches and have seen countless launch mistakes. Big… Small… We’ve seen them all. Here are some common errors to avoid when setting up your launch in the Launchpad.

 

1: There Was No Consultation with a Seller Coach.

Access to a Seller Coach is a free resource to sellers who want to utilize Viral Launch services, and our Coaches are experts in all-things Amazon. When sellers do not consult with a Seller Coach, the results are typically not as great, simply because Coaches know how to best optimize a launch. Our coaches have experience and data from thousands of launches and have seen plenty of successes and failures. A coach will work with a seller to analyze the product listing and determine an effective launch strategy, specific to that product. A launch will be most successful with the guidance and recommendations from a Viral Launch coach, so we definitely recommend getting in contact with the team! Email launches@viral-launch.com for a coaching consultation.

 

2: The Launch is Too Short.

We recommend launching for no less than 7 days…we’ve found it’s the sweet spot. A 3 or 4 day launch likely won’t establish the necessary sales history to increase your product’s ranking. On the other hand, a 10 day launch may require that you give away more units than necessary. With a 7-day launch, you’ll build up some credible history without giving excessive amounts of inventory.

 

3: Not Enough Units are Being Given Away.

To rank on page one for a target keyword, a seller must match or exceed the sales of the top sellers. When the number of promotional units is too small, the listing will not rank on page one for the target keyword. You must match or exceed the number of daily sales that the top sellers are moving, so if you give 10 units/day, and page one sellers are seeing 30 units/day, you will not land among them. In this case, you’d want to give 30-35 units/day so that Amazon would recognize that your listing is competitive with top sellers. Market Intelligence, our Amazon product research tool, can help to determine the number of units necessary to give away during a launch. In the Launchpad, when you enter your targeted keyword, you’ll find our Beta Launch Success Coach to help you to estimate the number of units needed to give per day to rank among the top sellers. For further instructions or to create the most optimized launch strategy possible, contact one of our Seller Coaches who are eager to help!

 

4: Too Many Keywords are Targeted.

Far too often, sellers target multiple keywords, not understanding how this will affect their rankings. Let’s break it down: Targeting multiple keywords dilutes the giveaway in a sense. For instance, let’s say you’re running a launch and giving away 200 units over a 7-day period. Take a look at the graph below:

With a launch targeting one keyword, all 200 units are attributed to that keyword. In this example, the necessary 200 units for this keyword will boost the product to page one because it’s matching the ~200 weekly sales that the top sellers are seeing. With the same launch targeting two keywords, the units are split in half so that only 100 units are attributed to each keyword. In this example, 100 units towards each keyword would not rank the product on page one for either keyword. Since page one sellers are moving around 200 units/week, a 100 units launch won’t convince Amazon’s algorithm that you’re competitive with those top sellers.

In this scenario, it would be best for the seller to only target one keyword, so that the desired ranking can be achieved. Or, the seller could give more units overall and to have a better opportunity to rank on page one for both keywords. Essentially, the more keywords you target, the more units you should give away.

 

5: The Coupons are Not Active When Tested.

After submitting a launch, it will show as pending approval from our team. Around 3:00pm EST on the afternoon before the launch goes live, our team will test one coupon. If the coupon is activated and set up correctly, we will approve the launch. If there is an issue with the launch, we will deny it and send you a message with the reason as to why.

When a promotion is created in Seller Central, Amazon requires a 4-hour window before activation. We strongly suggest inputting the launch after this 4 hour time frame so that there is no chance your coupons are inactive by the time we check them. Even if we check your coupons just one hour before they go live, we will have to deny the whole launch. To avoid coupon issues, we only approve launches with live coupons, so be sure that your coupons are live by the time you’ve submitted the launch for approval!

 

6: The Giveaway Price is Too High.

We typically recommend a giveaway price around 90-95% off retail, and our buyers are accustomed to seeing products around $1-$3. We want to be sure that we’ve got the best shot at moving the necessary inventory so that your launch is successful. For a more specific pricing suggestion, simply ask one of our coaches who would be glad to give you a recommendation.

 

7: The Max Order Quantity Isn’t Set.

This can turn out to be a very costly mistake. Before the fall of 2016, Amazon offered the option to set up $ off coupons. Setting these up, along with one coupon per customer and one-time use options, made it so that one customer could only get one product. It was fairly simple and straightforward.

In November of 2016, Amazon took away the $ off option for promotions, leaving % off as the only way to create coupons. In Seller Central, when you set up % off coupons, there is no way to set up a promotion that will allow you to restrict a customer from being able to grab 999 units with one coupon code. In order to protect your inventory, you need to set the Max Order Quantity to 1 for each SKU that the coupons apply to. If your Max Order Quantity is not set when running a promotion, you are putting your inventory in major jeopardy. This step cannot be overlooked!

We’re able to set your Max Order Quantity programmatically in our system through accessing your MWS account. Check out our video explaining how to protect your inventory in the Launchpad.

 

8: The Listing is Not Optimized.

Last but certainly not least, your entire listing (and especially your title) should be fully optimized before a launch. This is for two main reasons: ranking and conversions.

  • Ranking: Your title needs to be strong in order to fully utilize the launch. Although launches target one keyword, each sale is funneled through every keyword in the title. That means every word is fair game for a ranking boost with sales. With a fully optimized title, you’ll see a boost for multiple relevant keywords as sales flow through your title. Check out our blog post on How to Optimize Your Amazon Listing for Maximum Keyword Ranking for more detailed information on that topic.
  • Conversions: Your entire listing should be optimized with the goal of the highest conversion rate possible. This includes your price, photos, and copy. Once the launch has placed the product on page one, it’s completely up to the listing to convert well organically and maintain rank. Each listing element must be up-to-par to keep up with the top sellers. You don’t want to lose rank after all of the time and effort it took to achieve it!

 

9: The Listing Doesn’t Convert Post-Launch.

We often get the question, “How long is my ranking going to stick on page one after the launch?” It isn’t about sticking. It’s all about converting. Too often, we see sellers waste money by running a launch to achieve rank, ultimately to fall right back down due to a lack of organic sales. Maintaining rank is all about converting organically post-launch.

If page one sellers are seeing ~25 units/day on your specific keyword, you must continue selling competitively with them to maintain your page one rank. After a launch, if you’re only seeing 5 sales/day, your listing is going to slide down into the abyss of unseen listings. This is why we put so much emphasis on putting the time, money, and effort into having a listing that converts pre-launch. You’ll want to position your listing for success, so that it can sell competitively once it’s reached page one. The goal is to sell the necessary number of units (~25 in this example) each day at full price after the launch to be competitive with the top sellers. Then, you too will be a top seller!

 

Conclusion

Running a promotion definitely isn’t a small investment; we understand. That’s why we want to be sure that you fully utilize your launch! Learn from others, and avoid these launch mistakes when setting up your promotion in the Viral Launch Launchpad.

And as always, for more specific and tailored suggestions, we strongly recommend contacting one of our Seller Coaches by sending an email to launches@viral-launch.com. Happy selling!