Profitable — the goal that should guard every other goal.

Profitability is rarely the headline goal of an Amazon PPC plan, but it is the guard-rail that should sit underneath every other goal. Without it, "reach" becomes a budget sinkhole, "clicks" becomes a vanity metric, and "units" becomes a revenue-by-margin-burn machine. This episode is about how to set the floor.

The contribution-margin floor

Start from the unit economics, before PPC:

contribution margin per unit =
ASP − referral fee − FBA fee − landed COGS − returns reserve

Express this as a percentage of ASP. That percentage is your absolute ceiling on advertising cost-of-sale: at any ACOS above it, every additional PPC order loses money.

Most operators set the floor 2–5 percentage points below the ceiling, to leave room for promotions, returns shocks and FBA fee changes.

From floor to bid

Once the floor is set, the max profitable bid on any keyword is:

max profitable CPC = ASP × CVR × floor ACOS

With ASP €25, CVR 9 % and floor ACOS 22 %, max CPC is €0.50. This is the ceiling — the maximum you can pay and still be in the black at the keyword level. Reach and click-led campaigns may legitimately exceed it; profit campaigns must not.

The traps

• Ignoring returns. A category with 12 % returns has a different floor than one with 2 %. Use actual returns, not headline returns.
• Forgetting promotion stacks. An evergreen 10 % coupon plus a Lightning Deal cuts ASP enough that the profit floor needs recomputing for the week.
• Confusing TACOS and ACOS. Total ACOS (PPC spend / total revenue including organic) is a portfolio metric. ACOS is the per-campaign metric. The floor lives at the ACOS level.

Profit as the slowest goal

Profit goals respond slowest to bid changes, because conversion-rate variance can hide spend impact for weeks. Re-derive the floor monthly, but re-tune bids against it weekly. The cadence matters: a daily bid tune against a weekly profit signal is the right rhythm; a daily tune against a daily profit signal will produce noisy and contradictory changes.