Most sellers set a campaign's bid strategy once, during setup, and never look at it again. That single setting — Dynamic bids (down only), Dynamic bids (up and down), or Fixed bids — controls how aggressively Amazon adjusts what you actually pay for every single auction, on top of the bid you set at keyword or product level. Get it wrong and you either overpay for conversions that were never going to happen, or you underbid on the placements that convert best.
This is one of the most misunderstood levers in Seller Central. It sits quietly at campaign level, gets set once, and is rarely revisited — yet it has a direct, compounding effect on your ACOS. Here is exactly what each setting does, with real numbers, and when to use which.
The bid you enter is not the bid you pay. Your keyword or product bid is the ceiling Amazon works from. The bid strategy setting decides how much Amazon is allowed to move away from that ceiling in real time, based on how likely a given auction is to convert.
What Dynamic Bids Actually Do
Every time a shopper's search triggers your ad, Amazon runs a real-time prediction of how likely that specific auction is to result in a sale — factoring in the search term, the shopper's history, the placement (top of search, rest of search, product pages), device, and time of day. Your bid strategy setting tells Amazon what it is allowed to do with your bid once it has that prediction.
Critically, these adjustments happen at the point of auction, invisibly, before you ever see a report. What you see afterwards in Sponsored Products reporting is the average CPC across all of these micro-adjustments — not a single, static number.
The Three Bid Strategies
🔻 Dynamic Bids (Down Only)
Amazon can lower your bid in real time when a conversion looks unlikely, by up to 100%. It will never raise your bid above what you set. This is the most conservative option and Amazon's own default for new campaigns.
↕ Dynamic Bids (Up and Down)
Amazon can lower your bid when a conversion looks unlikely, and raise it by up to 100% (up to 50% for Product Display placements) when a conversion looks highly likely — most often for top-of-search placements.
🔒 Fixed Bids
Amazon never adjusts your bid, up or down, regardless of conversion likelihood. You pay exactly what you set (or slightly under, per second-price auction rules) for every single auction.
A Worked Example
Say you set a keyword bid of £1.00 on a manual campaign.
- Down only: if Amazon predicts low conversion likelihood, your actual CPC could drop to £0.40–£0.70. You never pay more than £1.00.
- Up and down: if the same auction is for a top-of-search placement with a shopper who has strong purchase intent, Amazon can push your bid up to £2.00 (a 100% increase) to win that impression. On a weaker auction, it drops the bid the same way the down-only setting does.
- Fixed: you pay £1.00 (or just under, based on the next-highest competing bid) on every auction you win, strong or weak.
The up-and-down setting can spend faster than you expect. A campaign with a modest daily budget and an up-and-down strategy on high-competition top-of-search placements can burn through budget by mid-morning if you have not sized your bids and budgets to account for the 100% ceiling. Monitor spend pacing closely for the first 1–2 weeks after switching.
Which Strategy to Use, and When
New Campaigns & Limited Conversion Data — Down Only
Start every new campaign, especially auto and broad-match discovery campaigns, on down only. Amazon's conversion prediction model needs data on your ASIN to be reliable, and until it has that, up and down can waste spend chasing top-of-search impressions that were never going to convert well for a brand-new listing.
Proven, High-Converting Keywords — Up and Down
Once a keyword has meaningful order volume and a stable conversion rate, up and down lets you win more of the top-of-search auctions that are statistically most likely to convert, without raising your base bid across every placement. This is where up and down earns its keep — concentrating extra spend only on the highest-intent impressions.
Tight ACOS Targets & Predictable Spend — Fixed Bids
If you are running to a hard ACOS ceiling, reconciling PPC spend against a fixed monthly budget, or running Sponsored Brands / Sponsored Display campaigns where you want predictable per-click cost, fixed bids remove the variability. You lose Amazon's real-time optimisation, but you gain a bid you can model precisely.
Defending Branded & Top-of-Funnel Terms — Up and Down
For your own brand name and high-value category terms where losing the top slot to a competitor is costly, up and down gives Amazon room to outbid rivals on the auctions that matter most, rather than being capped by a static bid that a competitor can simply beat.
Testing New Products or Categories — Down Only
When you are still validating whether a product or a new marketplace works for PPC at all, keep spend controlled with down only. You want clean signal on which keywords convert before you let Amazon spend more aggressively chasing them.
Bid Strategy vs Placement Multipliers — They Stack
Bid strategy is not the only lever affecting what you actually pay. Placement bid adjustments (Top of Search, Product Pages, Rest of Search) sit alongside it, and the two stack. If you have a +50% Top of Search placement multiplier and an up-and-down bid strategy, Amazon can apply the strategy's real-time adjustment on top of your placement-adjusted bid. This is why campaigns on up and down with high placement multipliers can see CPCs spike well beyond the base keyword bid.
When auditing a campaign with unexpectedly high ACOS, always check all three layers together — a high placement multiplier combined with up and down is a common, avoidable cause of runaway CPCs.
Common Mistakes We See
- Leaving every campaign on Amazon's default. New campaigns default to down only, which is safe but leaves performance on the table once a keyword has proven itself.
- Switching to up and down too early. Applying it to a campaign with under 15–20 conversions gives Amazon's prediction model too little to work with, and results are inconsistent.
- Using up and down with no placement multiplier review. The two levers compound. Set placement multipliers deliberately, not by default, before switching strategy.
- Assuming fixed bids mean fixed spend. Fixed bids fix your CPC, not your total daily spend, which still depends on impression volume and how many auctions you win.
- Never revisiting the setting. A campaign that made sense as down only during launch should usually move to up and down once it matures, or to fixed once ACOS targets tighten. Review bid strategy at the same cadence as bids and budgets, not as a one-off setup decision.
A practical rule of thumb: down only for anything unproven, up and down for your proven, profitable, high-intent keywords, and fixed bids where you need cost certainty over performance ceiling. Most mature accounts run a mix of all three across different campaigns — not one setting applied account-wide.
How We Manage Bid Strategy at StoreStride
We treat bid strategy as an active lever, not a set-and-forget checkbox. When we take over an account, one of the first audits we run is a campaign-by-campaign review of bid strategy against conversion volume, placement multipliers, and ACOS targets. It is common to find accounts running every single campaign on the Amazon default, including mature campaigns that have been generating consistent sales for months and are ready for up and down, and newer test campaigns that were switched to up and down too early and are bleeding spend on immature keywords.
We reassess bid strategy at the same review cadence as bids, budgets, and negative keywords — typically weekly during active optimisation, tapering to fortnightly once an account stabilises.
Not sure your bid strategy is set up correctly?
We audit every campaign's bid strategy, placement multipliers, and bid structure as part of our free account audit — and show you exactly where spend is being wasted. Get in touch today.
Book a Free Audit Call →Common Questions About Dynamic Bids
Does switching bid strategy affect existing campaign data?
No. Changing the bid strategy setting does not reset your campaign's history, keyword performance, or Amazon's existing relevance data for that campaign. It only changes how future auctions are bid.
Which setting does Amazon recommend?
Amazon's own guidance suggests up and down for campaigns focused on visibility and top-of-search competitiveness, and down only for campaigns where controlling ACOS is the priority. In practice, the right choice depends more on how much conversion data the campaign has than on the campaign's stated goal.
Can I set bid strategy per keyword?
No. Bid strategy is set at campaign level and applies to every keyword or product target within that campaign. This is why grouping keywords with similar maturity and intent into the same campaign matters — mixing brand-new and long-proven keywords in one campaign forces a compromise on bid strategy.
Does bid strategy apply to Sponsored Brands and Sponsored Display?
Sponsored Products offers all three settings. Sponsored Brands and Sponsored Display have more limited or different bid optimisation options, and the up-and-down ceiling for Sponsored Display placements is capped lower, at 50% rather than 100%.