The average amount that you spend on Amazon ad cost is calculated based on the ACoS, which means the advertising cost of sales. This particular amount is calculated by considering the ad spend cost and dividing it by the number of sales that you have been able to generate through ads.
For example, as a product marketer, you decide to start a campaign that can generate $600, and the overall cost reaches $90 overtime. Your ACoS (advertising cost of sales) under this scenario is what you get by dividing $90 by 600. In this situation, it stands at 15% against every dollar of purchase you have managed to make.
After you decide on an overall affordable ACoS cap, you further drill down to find your optimum CPC.
For ex – Acceptable ACoS = 40%, Average Selling price = $80
Then the spend that you can afford per sale becomes $32
Now, if you get 10 clicks for a spend of $32, your CPC (Ad spend/Clicks) becomes $3.2
This way, you can play around with bids at Keyword level as well as at Campaign level.