Can Indie Authors Make Money with Amazon Ads?

If you’re an indie author, you’ve inevitably hit that lull and dove into the pit of sage advice trying to find that nugget that will change everything. For me, I don’t think my low sales have to do with my writing. I’ve been at it for a long time, and although I am not at the epic level, I am certainly better than some of the stuff I’ve read. It makes you question how such poorly written works can get thousands of reviews and reach the best-seller list, and it all comes down to luck and visibility.

So, I dove into how to get in front of readers, and inevitably, if you’re stuck on the Amazon KDP teat, the advice will point to Amazon Ads—the supposed golden ticket, silver bullet, and secret weapon that turns unknown authors into bestsellers. But does it actually work? Can you run an Amazon Ad campaign and expect to make a profit? Down the rabbit hole, I went. In trying to justify to myself why I should fork over my hard-earned money to do an ad campaign, I discovered how much the cards are stacked against me and thought I would share what I found.

The short answer is yes—technically, you can make a profit. If it was no, no one would run ads. But the real answer? You need incredible luck, an optimized sales funnel, a price point that makes ads worthwhile, and a lot of expendable capital. For most indie authors, Amazon Ads aren’t a growth tool—they’re a money pit that does little more than give you some visibility.

To help keep everything in perspective, Amazon’s advertising business has experienced significant growth over the past few years. Here’s a breakdown of its annual advertising revenue:​

• 2020: $19 billion​
• 2021: $31 billion​
• 2022: $37.7 billion​
• 2023: $46.9 billion​
• 2024: $56.2 billion​

In the fourth quarter of 2024 alone, Amazon’s advertising revenue reached $17.3 billion, marking an 18% increase compared to the same period in 2023. This is for their entire advertising business, not specifically Amazon Ads for KDP. They do not disclose those figures. They also don’t disclose how much they make from KDP. I wonder why? It may be that KDP is not profitable, but sucking advertising fees from Indie authors is. Hmm. That makes you think, doesn’t it? Anyway, I digress.

So now we know why Amazon encourages us to use Amazon Ads, but is a win/win situation? Let’s break it down with some real numbers.

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Scenario 1: Advertising a $2.99 Book

Most self-published e-books are priced at $2.99, especially for new authors trying to attract readers. I won’t bother with paperbacks- if you’re an indie author you know why. At this price point, if you exclusively sell books on Amazon, they take 30% of your earnings, leaving you with a $2.09 royalty per book sold.

Now, let’s look at the cost of running ads.

• Budget: $420 (over 4 weeks). This is about $15 a day—a little high, but we’re committed to making this work and getting sales!
• Cost per click (CPC): $0.35–$0.75
• Clicks generated: ~840 (assuming $0.50 per click)
• Conversion rate: 3-5% (this is the sweet spot for Amazon Ads)

How Many Books Would You Sell?

• 3% conversion rate (low-end) → ~25 books sold → $52 earned
• 4% conversion rate (mid-range) → ~34 books sold → $71 earned
• 5% conversion rate (high-end) → ~42 books sold → $88 earned

Bottom Line: You just lost $330–$368 on ads. Even at a 5% conversion rate, you don’t even come close to breaking even.

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Scenario 2: Advertising a $4.99 Book

The royalty rate is still 70% at $4.99, pricey for an unknown author, but you now earn $3.50 per book instead of $2.09.

Using the same ad campaign:

• Budget: $420
• Clicks: ~840
• Conversion rate: 3-5%

How Many Books Would You Sell?

• 3% conversion rate (low-end) → ~25 books sold → $87 earned
• 4% conversion rate (mid-range) → ~34 books sold → $123 earned
• 5% conversion rate (high-end) → ~42 books sold → $147 earned

Bottom Line: You still lost $273–$333 on ads. Better than the $2.99 price point, but still far from profitable.

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Scenario 3: Advertising Book 1 of a Trilogy (All Books at $2.99)

One of the biggest arguments for using Amazon Ads is that even if you lose money on Book 1, the read-through rate to Book 2 and Book 3 will eventually make up for it. Let’s see how that plays out in reality when all books are priced at $2.99 and we use a realistic read-through rate.

Assumptions:

• All books priced at $2.99 ($2.09 royalty per sale)
• 50% of readers continue to Book 2 (this is considered a very good read-through rate)
• 25% of original buyers read the entire trilogy
• Ad spend: $420/month
• Cost per click (CPC): $0.50
• Conversion rate: 4% (mid-range estimate)

Total Revenue per Month: $146.30. Net Profit (Only Ad Spend on Book 1): -$273.70

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Scenario 4: Advertising Book 1 of a Trilogy (Raising Prices for Books 2 & 3)

What happens if you increase Book 2 and Book 3 to $4.99 (a common strategy), keeping Book 1 at $2.99 to attract readers with the same parameters above?

Total Revenue per Month: $188.60. Net Profit (Only Ad Spend on Book 1): -$231.40

Break-even timeline? At this rate, you’d need at least 6 months and $1,500+ in ad spend before potentially seeing a profit. That’s assuming nothing goes wrong.

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Scenario 5: Advertising Book 1 with Higher Read-Through (75% to Book 2, 50% to Book 3)

What if read-through rates are much better? Keep in mind, these are not realistic. If you are getting read-throughs at this level, you likely don’t need the data in this article. You’re killing it!

Total Revenue per Month: $258.60. Net Profit (Only Ad Spend on Book 1): -$161.40

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Scenario 6: What Conversion Rate is Needed to Break Even?

To break even at $500/month, a conversion rate of 12% is required, which is far above what most authors see. Most indie authors struggle to hit even 5% conversion rates, making 12% nearly unattainable without an already-established audience, and again, you likely don’t need the information in this post.

• Ad Spend: $500 per month

• CPC (Cost Per Click): $0.50

• Clicks Per Month: 1,000 (since $500 ÷ $0.50 = 1,000 clicks)

• Read-through Rates: Book 2: 75% of Book 1 buyers continue; Book 3: 50% of Book 1 buyers continue

What’s Missing?

Kindle Unlimited (KU) Page Reads

• Many indie authors rely on KU to boost profits. I also make more in KU reads than ebook sales. But KU pays ~$0.004 per page read—so unless your books are long, it won’t fix these numbers. Mine are long, and I make about the same in KU reads as an ebook sale, but I haven’t seen any profit. Anyway, these are hard to track through Amazon Ads, so gauging the impact is difficult. If there is a profit, it is minor.

Ad Competition & Rising Costs

• CPC rates fluctuate. Many fantasy & thriller authors pay $0.75+ per click, making profitability even harder. For the really juicy keywords, it can easily skyrocket to over a dollar to be competitive.

Learning Curve & Wasted Ad Spend

• Most authors burn money in the first 3 months before optimizing ads. Breaking even in that timeframe is highly unrealistic. It is incredibly frustrating to tune keywords and stay patient enough to optimize. Especially if you don’t know if you will make a profit.

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Final Verdict: Is Amazon Advertising Worth It?

If you’re a self-published author hoping that Amazon Ads will suddenly make your book a bestseller, think again. The numbers show that most authors lose money—sometimes hundreds or thousands of dollars—before they ever see a return.

Amazon Ads work only if you have: ✔ A high-converting book page (strong cover, blurb, and reviews) ✔ A higher price point ($4.99–$6.99 or more) ✔ A series with strong read-through ✔ The ability to experiment and optimize ads over time (which means spending more before seeing results). A few thousand dollars may do it… or it may not.

Otherwise, you’re better off focusing on organic marketing, reader engagement, and alternative promotion methods—because Amazon Ads, for most indie authors, are nothing more than an expensive gamble.

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Disclaimer:

These calculations are based on industry averages. There are always outliers, and some authors may see better results. However, for many people, conversion rates are far lower than the 3-5% used above. Some struggle to hit 2% conversion rates, making profitability even more difficult. With all my tinkering over the years, I’ve not seen a 2% conversion rate, but my advertising budget is low. True, it may be because I don’t run my campaigns for months, but it is hard to see money go down the drain with no results (or guarantee of results). I promised myself never to spend more than I make in this game. That may seem shortsighted, but pouring money into a passion is too easy.

I don’t mean to add another discouragement on the perilous road of self-publishing, but I do want to prevent you from wasting your hard-earned money. Passions are hard. It is easy to splurge on the dream, which is fine if you can afford it. Like gambling, the odds are always stacked against you, and it is good to be aware of the odds, but maybe, just maybe, the gods smile upon you and you hit the jackpot, right?

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What Do You Think?

Have you tried Amazon Ads? Did they work for you, or did you end up burning cash? If you found success, what’s your trick? I’m sure others would love to know (or you can keep it to your chest). Let’s discuss in the comments!

Cheers!