One of the most important actions you will need to take in Flywheel is setting your MACS. It is critical to how our algorithm works and impacts your spend. Be sure to set the bidding strategy in Seller/Vendor Central to 'dynamic bids - down only'.
How to determine your starting MACS
To set MACS you must know what your goals are for the products within the campaign, as well as your gross margin.
1. Determining your goals (objectives):
Next, ask yourself, what are you trying to achieve?
- Grow sales = Discovery, launch, growth
- Improve efficiency = Target profitability
2. Determining your Gross Margin:
Knowing your gross margin will give you an idea of how much money you have to spend on advertising after factoring in the cost of selling your product. Use the equation below to calculate your margins for each product or upload your COGs to Flywheel:
3. Setting your MACS:
Goals (objectives) and margins work together to help determine the ideal starting MACS. For example, if you are launching a new product and want to grow sales, you want to exceed your current gross margin to gain traction on your product offering.
- Goal: Launch → Increase Sales → Higher MACS
- Goal: Profit → Reduce Spend → Lower MACS
Check out this chart to understand how to set MACS based on your gross margins and campaign goals:
Caution! Setting a MACS that is more than 10% lower than the campaign's current ACoS can result in lower sales. For example, a campaign that is currently performing at an ACoS of 80%, for the most part, should not have a MACS lower than 70%, regardless of margin and objective.
Which Amazon bidding strategy should I use?: Dynamic Bids - Down Only works best!
Evaluate Performance every 1-2 weeks: When to make changes to MACS
MACS Calculator: Using the MACS Calculator
Learn how to apply this information to your Business: Setting MACS: Deep Dive
Next: How to set MACS in the Flywheel Software