Plenty of brands are seeing strong sales on Amazon and Walmart—but still missing their profit goals.
Something’s not adding up. Despite healthy revenue, many sellers are watching margins shrink, quarter after quarter. What’s behind the gap?
In our latest guide, we break down the three biggest reasons brands miss their profitability targets—and how top-performing teams avoid the same fate.
Here’s a quick preview.
1. Measuring the Wrong Metrics
Many brands are still relying on ACoS and ROAS as their north star metrics. But these figures don’t tell you enough to understand true profitability.
Without considering margins, fees, organic vs. paid sales, incrementality, and more, it’s easy to overspend without realizing it.
A more accurate metric? TACoS—Total Advertising Cost of Sales—as well as SKU-level profit tracking and incrementality analysis.
You need the right data, analyzed together, to make profit-centered decisions.
2. Wasted Ad Spend
The second culprit: inefficient advertising execution.
Even if you have solid demand, you’ll struggle to hit profitability goals with poor campaign structure, irrelevant keyword targeting, or manual or slow bid management.
Common issues we see:
- Underutilizing high-performing search terms
- Neglecting negative keywords
- Too many products or goals in one ad group
- Overbidding (common in a first-price auction model)
- Lack of regular, data-driven optimizations
Smarter brands are using AI-enabled marketplace tools to rein in wasted spend—and grow profit, not just sales.
3. Misaligned Strategy Across Products and Channels
Ads don’t operate in a vacuum. Running ads on low-margin or low-stock products can turn a decent campaign into a margin killer.
The most successful brands align ad spend with:
- SKU-level profitability
- Inventory availability
- Products with organic momentum
They also adapt their approach by platform: Amazon strategies are optimized for scale, while Walmart campaigns focus on cost efficiency and margin protection.
Why Profit Must Be the Priority
Growing revenue without growing profit isn’t a sustainable model. In 2025 and beyond, brands that thrive will be those that:
- Align metrics to margins
- Automate and optimize ad execution
- Connect ad strategy with inventory and product data
- Adjust tactics for each marketplace
If your team is ready to evolve your approach, this guide walks through what it takes.
