Hiring an Amazon Agency: What Seven-Figure Sellers Need to Know
- Amazon Growth Lab
- Jan 13
- 6 min read
Most sellers hire agencies when something breaks. Your main product goes out of stock for three weeks and loses page one ranking. Ad spend doubles but sales stay flat. A competitor launches and steals 40% of your Buy Box share. These fires cost more to fix than they would have cost to prevent.
The pattern repeats: stockouts hit, margins compress, revenue stalls, then founders scramble for help. By the time most sellers start looking for agency support, they've already lost 15-20 ranking positions over 90 days while competitors captured share.
By then, CPCs have climbed 30-40% and you're paying premium rates just to recover lost ground. You're making reactive decisions (panic inventory orders, emergency promotions) that destroy the margins a good agency would have protected from the start.
The right agency prevents these fires instead of fighting them. Here's how to find one.
What Questions Should I Ask When Hiring an Amazon Agency?
Start with unit economics, not campaign tactics. Ask:
"How do you decide if a 30% ACoS campaign is profitable?" If they can't discuss your break-even threshold or TACoS impact in the first conversation, they don't understand full-funnel economics.
At Amazon Growth Lab, managing $100M+ in ad spend, we've found that agencies fixated on ACoS miss the complete picture. ACoS (Advertising Cost of Sale) measures ad spend divided by ad-attributed sales. TACoS (Total Advertising Cost of Sale) measures ad spend divided by total sales (paid plus organic). A 30% ACoS campaign might represent just 15% TACoS if it's driving strong organic performance.
Ask for category-specific proof:
"Show me case studies in my price range and category." An agency that scaled $15 beauty products operates differently than one managing $200 electronics. Category dynamics (CPC ranges, conversion patterns, seasonal curves) vary significantly. When we optimized a leading eyewear brand's Amazon campaigns at Amazon Growth Lab, competitive intelligence specific to fashion accessories informed every decision.
Question their optimization rhythm:
"Walk me through your first 90 days and weekly management process." Professional management requires consistent optimization, not monthly check-ins. Watch for these red flags during interviews:
Vague answers on margins and TACoS, obsessed only with ACoS
No clear perspective on defensive versus offensive budget allocation
Overpromising ("we'll cut ACoS in half in 30 days") without asking about your unit economics
No references in your category or price band
"Set and forget" mentality without weekly optimization commitments
Ask about their technology:
"What tools do you use and why multiple platforms?" Single-tool agencies can miss cross-validated insights. At Amazon Growth Lab, we combine Helium 10's Cerebro for keyword research, Jungle Scout for market intelligence, and proprietary algorithms for bid optimization. No single platform captures Amazon's complexity.
Dig into account management:
"Who will actually manage my account and how many accounts do they handle?" You want a dedicated manager handling 8-12 accounts maximum, not 30+. Ask how they structure campaigns for new launches versus mature bestsellers. Listen for persona-based targeting, intent funnels, and lifecycle-stage thinking.
What Should an Amazon Agency Proposal Include?
Professional proposals start with diagnosis, not promises. Legitimate agencies audit before proposing. Expect analysis of current TACoS and ACoS by campaign type, conversion rates and CPC trends by ASIN, visibility gaps on priority keywords, and profit profile by product.
Without baseline metrics, proposed improvements are guesses. At Amazon Growth Lab, when we onboarded Ernst Grain, the first 30 days focused on backend search term optimization across all 250 bytes and campaign architecture before scaling spend.
Good proposals outline a 90-day action plan: weeks 1-2 for structure audit and data collection, weeks 3-6 for campaign rebuild with persona-based targeting and intent funnels, weeks 7-12 for creative testing and scaling profitable segments.
Budget and target ranges should segment by product stage. New launches need 25-40% ACoS initially to build ranking. Established bestsellers run at 15-25% ACoS with 8-12% TACoS targets. Defensive campaigns maintain break-even ACoS to protect market share. Avoid agencies proposing single ACoS targets across your entire catalog.
Proposals must define what the agency owns versus what your team provides. Clarify responsibilities for creative assets, inventory planning, and financial reporting. Specify reporting cadence: what you see weekly versus monthly, dashboard access, and performance review schedules.
Understanding pricing models matters. Here's how they compare by account size:
Pricing Model | Best For | Monthly Cost | Pros | Cons |
% of Ad Spend | Scaling brands | 10-20% of spend | Aligns incentives with growth | Can incentivize overspend |
Flat Retainer | Predictable budgets | $3K-$15K | Cost certainty, clear scope | Needs performance clauses |
Hybrid Model | $100K+ monthly spend | Base + performance bonus | Balances alignment | Complex structure |
At Amazon Growth Lab, we've found that brands spending under $100K monthly prefer flat retainers for predictability. Above $100K, hybrid models align agency growth with your profit growth, not just ad spend growth.
How Do I Know If My Amazon Agency Is Working?
Track input metrics (what they control) separately from output metrics (business results). Input metrics reveal execution quality: campaign structure quality with persona-based targeting, search term coverage on priority keywords, wasted spend trend through negative keyword discipline, and share of voice in your category.
Output metrics measure business impact: revenue growth rate, TACoS trend (not just ACoS), profit per unit sold, and organic rank improvement on priority terms.
At Amazon Growth Lab, when we worked with Ernst Grain, input metrics (campaign coverage, negative keyword efficiency) improved in weeks 3-6. Output metrics (TACoS reduction from 5% to 2.5%, 30% revenue growth) showed in weeks 8-16. This lag is normal.
Set timeline expectations based on Amazon Growth Lab's experience managing 100+ accounts: around 30 days for structure improvements and data collection baseline, roughly 90 days for measurable ACoS improvement (often 5-10 percentage points), and about 180 days for TACoS optimization and organic rank gains.
Separate market conditions from execution. CPCs rise across Amazon. Categories contract. These aren't poor agency performance. Evaluate relative performance: your category's average CPC trend versus yours, your share of voice versus top competitors, your TACoS trend versus absolute ACoS (successful campaigns drive organic sales that improve TACoS even when ACoS holds steady).
Choosing an Agency You'd Trust in Q4
Look for agencies that start with your unit economics, not keyword lists. At Amazon Growth Lab, when clients hit supply chain issues in Q3, our TACoS focus prevented margin collapse while competitors burned cash maintaining ACoS targets that destroyed profitability.
Choose the team you'd trust during a bad quarter. The agency promising 50% ACoS reduction in 30 days won't pick up the phone when Amazon changes the algorithm or your category gets flooded with Chinese sellers.
Ask yourself: do they sound like they've managed accounts through actual problems, or are they reciting best practices from a webinar? The difference shows up when things break.
Frequently Asked Questions
How much do Amazon agencies typically charge?
A common range is $3K-$15K monthly flat retainer or 10-20% of ad spend, depending on account size and complexity. Brands spending under $50K monthly usually pay flat retainers. Above $100K monthly, percentage-of-spend or hybrid models become common. Enterprise accounts ($500K+ monthly) often negotiate custom arrangements with performance incentives tied to revenue growth or TACoS improvement.
When should I hire an Amazon agency instead of managing PPC myself?
Hire when you're spending $10K+ monthly on ads or managing 5+ ASINs with complex campaign structures. In-house management makes sense under $5K monthly if you have time to learn Campaign Manager, Search Term Reports, and bid optimization. Between $5K-$10K is the transition zone where agency expertise often pays for itself through wasted spend elimination alone.
What's the difference between ACoS and TACoS and why does it matter for agency selection?
ACoS measures ad spend divided by ad-attributed sales. TACoS measures ad spend divided by total sales (paid plus organic). TACoS reveals complete advertising efficiency since successful campaigns drive organic sales. A 30% ACoS campaign might represent just 15% TACoS with strong organic performance. Agencies that only discuss ACoS miss how their work impacts your total business profitability.
How long does it take to see results from professional Amazon agency management?
The timeline is roughly 45-90 days for meaningful improvements. Weeks 1-4 typically focus on auditing and restructuring campaigns. Weeks 5-8 optimize based on new data. Weeks 9+ scale profitable segments. Accounts starting above 35% ACoS often see 8-12 percentage point improvements within 90 days. TACoS improvements take longer (expect 120-180 days).
Should I hire an agency that only does Amazon PPC or one that offers full-service management?
Full-service agencies optimize interactions that specialists miss. PPC data informs listing keyword strategy. Listing optimization improves conversion rates, lowering ACoS. Inventory management prevents stockouts that kill rankings. A full-service approach (PPC plus listings plus operations) delivers better results because all elements work together rather than operating in silos that create inefficiencies.
What red flags should I watch for when interviewing Amazon agencies?
Avoid agencies that focus only on ACoS without discussing TACoS or margins, promise specific results without auditing your account first, can't provide category-specific case studies in your price range, suggest monthly-only optimization instead of weekly management, or use single tools instead of cross-validated data sources. Also watch for vague answers about who manages your account and how many accounts each manager handles.
How do I know if agency pricing is fair for my account size?
Fair pricing scales with complexity, not just ad spend. Common ranges include: accounts under $25K monthly ad spend at roughly $3K-$6K flat retainer; $25K-$100K monthly at about $6K-$12K or 12-15% of spend; above $100K monthly at 10-12% of spend or hybrid models. Verify pricing includes weekly optimization, monthly reporting, and quarterly strategy reviews (not just campaign monitoring). Ask what's included and what costs extra.