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The short version
- ACoS = ad spend ÷ ad sales × 100. $25 spent to make $100 in ad sales is a 25% ACoS.
- There's no single good ACoS. Your break-even ACoS is your profit margin before ads, and a good ACoS is below it.
- Many sellers aim for a target ACoS several points under break-even, and accept a higher ACoS for a short time when launching.
- Also watch TACoS (ad spend ÷ total sales), which shows whether ads are growing the whole business.
What is ACoS?
ACoS (advertising cost of sales) is the share of your ad-driven sales that you spent on ads. Amazon shows it for every Sponsored Products, Sponsored Brands and Sponsored Display campaign.
If you spend $40 on ads and those ads bring in $160 in sales, your ACoS is 40 ÷ 160 = 25%. A lower ACoS means each dollar of ad sales cost you less.
ROAS (return on ad spend) is the same number turned upside down: ad sales ÷ ad spend. A 25% ACoS is a ROAS of 4.0. Amazon shows both, and they always tell the same story.
Break-even ACoS: the number that matters
A "good" ACoS depends entirely on your margin. An ACoS of 35% is excellent for a product with a 50% margin and a disaster for one with a 20% margin. The line between the two is your break-even ACoS: the ACoS where the ad spend uses up all the profit on the sale.
Worked example
These numbers are an example. Use your own product's costs and your real Amazon fees.
- Selling price$30.00
- Subtract your costsProduct and freight $7.50, Amazon referral fee (15% in this example) $4.50, FBA fee (example) $5.20
- Profit before ads$30.00 − $7.50 − $4.50 − $5.20 = $12.80
- Break-even ACoS$12.80 ÷ $30.00 = 42.7%. Below this, ads make money. Above it, every ad sale loses money.
Enter your price, costs and ad spend to get your ACoS, TACoS, ROAS and break-even ACoS in seconds.
Open the free ACoS calculatorSo what is a good ACoS on Amazon?
A good ACoS is one that's below your break-even ACoS and fits what the campaign is for. Most sellers set a target a few points under break-even so ads still leave real profit. Here's how the target usually shifts with the goal:
| Campaign goal | Where ACoS can sit | Why |
|---|---|---|
| Launching a new product | Above break-even, for a limited time | You're buying sales history and reviews that help organic rank later |
| Growing a proven product | Around your target ACoS | Balance of sales volume and profit |
| Maximizing profit | Well below break-even | Only keep keywords that convert cheaply |
| Defending your brand name | Usually low | Shoppers searching your brand convert well |
Break-even and target ACoS by margin
| Profit margin before ads | Break-even ACoS | Break-even ROAS | Target ACoS for 10% profit | Target ROAS |
|---|---|---|---|---|
| 15% | 15% | 6.67 | 5% | 20.00 |
| 20% | 20% | 5.00 | 10% | 10.00 |
| 25% | 25% | 4.00 | 15% | 6.67 |
| 30% | 30% | 3.33 | 20% | 5.00 |
| 40% | 40% | 2.50 | 30% | 3.33 |
| 50% | 50% | 2.00 | 40% | 2.50 |
Break-even ACoS equals your profit margin before ad spend. The target column leaves a 10% net profit on ad-driven sales. ROAS is 1 divided by ACoS.
Don't judge a campaign on a few days of data. Amazon attributes sales for several days after the click, and small numbers of clicks swing ACoS wildly. Give changes at least a week or two before deciding.
ACoS vs TACoS
TACoS (total advertising cost of sales) compares ad spend with all your sales, ad-driven and organic.
ACoS tells you if your ads are efficient. TACoS tells you if ads are helping the business as a whole. If TACoS falls over time while total sales rise, your ads are lifting organic sales too, which is exactly what you want. If TACoS keeps rising, you're becoming dependent on paid traffic.
How to lower your ACoS
- Add negative keywords. Check the search term report weekly and negate searches that get clicks but no sales.
- Lower bids on expensive keywords that sell, instead of pausing them outright.
- Move winners to exact match in their own campaign, with a bid you control.
- Improve the listing. Better main images, titles and reviews raise conversion, and higher conversion lowers ACoS on the same bids.
- Pause what never converts. Set a click limit, for example 15 to 20 clicks with no sale, and act on it.
- Track it every week by campaign, not just the account total.
Stop guessing which campaigns make money
The PPC Tracker for Amazon Sellers logs spend and sales by campaign, calculates ACoS, TACoS and ROAS, flags campaigns above your break-even ACoS, and shows trends week by week. Works in Google Sheets and Excel.
Frequently asked questions
What is a good ACoS for Amazon?
One that's below your break-even ACoS, which equals your profit margin before ad spend. If your margin before ads is 35%, any ACoS under 35% is profitable on ad sales, and many sellers aim a few points lower to keep a real profit.
How do you calculate ACoS?
Divide your ad spend by the sales from those ads and multiply by 100. $30 in ad spend that brings in $120 in sales is a 25% ACoS.
How do you calculate break-even ACoS?
Take the selling price, subtract all costs except advertising (product, freight, Amazon referral and fulfillment fees, and any others), and divide what's left by the selling price. That percentage is your break-even ACoS.
What's the difference between ACoS and ROAS?
They're inverses. ACoS is ad spend divided by ad sales; ROAS is ad sales divided by ad spend. A 25% ACoS is the same as a ROAS of 4.
What is TACoS?
Total advertising cost of sales: ad spend divided by all your sales, including organic ones. It shows whether ads are growing your whole business, not just the ad-driven part.
Is a high ACoS always bad?
No. A high ACoS can make sense for a short product launch, when you're buying sales history that helps organic rank. It becomes a problem when it stays above break-even with no plan to bring it down.
Figures in the worked example are illustrative, not typical results. Amazon's fees vary by category, size and marketplace and change over time, so use your own numbers. SuanSupply is not affiliated with Amazon.