Amazon offers three campaign bid strategies. Dynamic bids down only lowers your bid in real time when a click looks less likely to convert. Dynamic bids up and down does the same but will also raise your bid — by up to 100% for top-of-search and up to 50% for other placements — when a conversion looks likely. Fixed bids use the bid exactly as entered, with no automatic adjustment in either direction.
What each one is for
Down only is the conservative default. It cannot overspend relative to your stated bid, which makes it sensible for a new campaign, an untested keyword set, or any account where control matters more than volume.
Up and down chases conversions and can raise your effective cost per click substantially. It belongs on campaigns with proven exact-match terms and a known conversion rate — not on discovery campaigns.
Fixed bids remove Amazon's judgement entirely, which is mainly useful when running a deliberate test and the bid must be the one variable that is not moving.
Testing it properly
Changing bid strategy changes which auctions you win, so the search term mix changes with it. Give any change enough time to accumulate meaningful clicks, and do not change bids in the same week if you want a readable result.
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