LOS ANGELES, CA, July 15, 2025 /24-7PressRelease/ -- Amazon advertising costs have reached new highs in 2025. Ahmed Malik, CEO of Smart Sellers Academy Inc. (SSA), says sellers need to adjust their strategies to stay profitable. Malik points to a sharp rise in Sponsored Product and DSP (Demand-Side Platform) pricing as a key challenge for many store owners trying to scale.

"Ad costs are not just up, they are reshaping what it takes to run a successful store," Malik said. "A model that worked two years ago might now lead to break-even or loss. We've had to build smarter systems that look at the full picture, not just clicks and conversions."

SSA oversees over 200 Amazon stores and manages over $600 million in sales. Through its vertically integrated infrastructure, SSA provides warehousing, logistics, product research, and advertising strategy for capital-ready clients. Malik said the company began changing its approach after seeing cost-per-click rates rise across nearly every major category.

Reports from Marketplace Pulse and SSA's internal data show that average CPCs for Sponsored Product ads are up by 27% compared to last year. Niches like personal care and consumer electronics are seeing even higher spikes. Malik says this has made the traditional pay-to-scale approach less effective.

"Pushing ad budgets and chasing rank used to be enough. That is no longer true," he said. "You need to understand where the margin is coming from and how long the customer will stay with your brand."

SSA's response involves looking beyond one-time sales. Ahmed Malik's teams now focus on product lifecycles, customer retention, and long-term value. Stores are designed with built-in email funnels, landing pages, and upsell sequences. Every product is selected based on how well it fits into a broader brand strategy.

The firm has also avoided using a flat ACoS (Advertising Cost of Sales) target across all campaigns. Instead, they track performance by product type and launch stage. Established products with strong reviews are kept lean on ad spend, while new listings are supported with more aggressive campaigns and longer runway.

"Not every product needs the same ad budget. We match spend to margin and to the customer journey. This helps us scale without wasting capital," Malik said.

SSA's operational model is a significant part of its advertising strategy. Ahmed Malik explained that weak logistics and sourcing can make a well-optimized ad campaign unprofitable. SSA runs its warehouses in California and Connecticut and sources products through long-term partners in Asia and the Middle East. This control allows them to keep costs predictable and fulfillment times fast.

Advertising is now part of every decision made inside SSA. Forecasting tools include ad costs alongside freight, fees, and expected return rates. A product is not launched if it does not make sense with the current ad rates.

"Sellers often blame ads for low margins. But the real problem is poor planning," Malik said. "If you control your operations, you can make the ad side work."

He also cautioned against pulling back too far on media spend. "Cutting budgets may save money today, but it will stall growth tomorrow. The key is not to spend less, it's to spend better."

SSA maintains strong margins across its client stores, with average profitability between 25% and 40%. Malik says the key is not to chase the latest software tool or marketing trend. Instead, sellers need to build consistent and measurable systems.

Advertising is not a quick fix. It should support a real business with real structure. If your brand cannot handle rising costs, then it was never stable to begin with."

Looking forward, Ahmed Malik believes success on Amazon in 2025 will come down to disciplined execution. Advertising will remain essential, but only for those who can align it with strong operations and clear customer value.

"When you treat each ad as part of a bigger plan, you can still grow, even in a tight market," Malik said.

To learn more visit: https://www.smartsellersacademy.com/

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