Enter your ad spend and the revenue generated from ads to calculate your ACoS percentage, target ACoS and whether your Amazon advertising is profitable.
ACoS (Advertising Cost of Sales) is the percentage of ad-attributed sales spent on advertising. If you spent $250 in ads and generated $1,000 in ad-attributed sales, your ACoS is 25%. It's the primary metric Amazon sellers use to measure PPC campaign efficiency.
ACoS is the inverse of ROAS. An ACoS of 25% = ROAS of 4x. Lower ACoS means more efficient advertising — but the lowest possible ACoS isn't always the goal. During product launch phases, sellers often accept a higher ACoS to generate sales velocity and reviews.
Your target ACoS is the maximum ACoS at which your advertising is break-even. It equals your profit margin percentage. If your product has a 30% profit margin, your break-even ACoS is 30%. An ACoS above 30% means you're spending more on ads than you're making in profit on those sales. An ACoS below 30% means your ads are generating additional profit beyond just covering their cost.
A good ACoS depends entirely on your profit margin. A 25% ACoS is profitable for a product with 40% margin, but loss-making for a product with 20% margin. Calculate your target ACoS using the input above before benchmarking against industry averages.
ACoS measures ad spend as a percentage of ad-attributed sales only. TACoS (Total ACoS) measures ad spend as a percentage of total revenue including organic sales. TACoS gives you a better picture of how advertising affects overall business profitability. Experienced sellers track both.
Not always. During product launch, a higher ACoS is acceptable to generate reviews and ranking. For established products with good organic rank, lower ACoS (profitable campaigns) is the goal. Defensive campaigns on branded terms can run at higher ACoS to protect market share. Match your ACoS target to your product's lifecycle stage.
Tighten targeting (switch from broad to phrase/exact match), add negative keywords to stop wasting spend, pause non-converting ad groups, improve your listing (photos, title, bullets) to convert clicks better, and reduce bids on keywords with high ACoS. Lowering bids is often the fastest lever.