Key takeaways
- ACoS uses ad-attributed sales; TACoS uses total sales.
- Targets come from margin and goals.
- Read ratios together with CTR, CPC and conversion rate.
- No benchmark replaces your own product economics.
ACoS
Advertising Cost of Sales (ACoS) is ad spend divided by sales attributed to those ads, expressed as a percentage. If you spend 20 and the ads are credited with 100 in sales, ACoS is 20%.
TACoS
Total Advertising Cost of Sales (TACoS) divides ad spend by total sales, including organic. It helps show whether advertising is building overall sales or simply substituting for them.
Why targets depend on your business
A suitable ACoS depends on margins, goals (launch versus profit) and attribution. A figure that is healthy for one product can lose money for another, so set targets from product economics rather than a general benchmark.
Related measures
ROAS is the inverse of ACoS: attributed sales divided by spend. Click-through rate, cost per click and conversion rate explain why ACoS moves.
Worked example
Suppose a product sells for 20 with a 6 profit margin before advertising, a 30% margin. Break-even ACoS is 30%, because spending 30% of ad-attributed sales on advertising would wipe out the profit on those sales. Aiming for an ACoS near break-even might suit a launch, while a lower target suits a mature product where profit is the priority.
These figures are only an illustration; use your own costs and goals.
Common mistakes
Teams often optimize ACoS in isolation and cut spend on campaigns that build awareness or defend rankings. Others compare ACoS across different products or campaign types without adjusting for goals. Always read the ratio alongside sales volume, conversion rate and TACoS.
Using the ratios in reporting
Report ACoS and TACoS by product and campaign type, with a note about the target for each. Highlight where results are above or below target and what you plan to change. This turns the numbers into decisions.
Questions to ask before changing a campaign
Before cutting bids because ACoS is high, check the product's conversion rate, price competitiveness and listing quality. A high ACoS often points to a listing problem rather than a bidding problem. Check whether the campaign has a strategic purpose, such as defending a branded term or supporting a launch.
Make one change at a time where possible and note the date so you can judge the effect later.
ACoS, ROAS and the same information
ROAS and ACoS describe the same relationship from opposite directions. If ACoS is 25%, ROAS is four, because each unit of spend is credited with four units of sales. Some teams prefer ROAS because higher is better, which feels more intuitive in reports.
Pick one convention for your team and use it consistently so targets and results are always comparable.
Your next three steps
Apply the ideas to your own products this week.
- Calculate break-even ACoS for your top three products.
- Set a target for each based on its goal, not a generic benchmark.
- Report ACoS and TACoS together with a note on what you will change.
Frequently asked questions
Is a lower ACoS always better?
Not necessarily. A very low ACoS can mean you are under-investing in growth.
How do I calculate break-even ACoS?
Divide the profit margin before advertising by the selling price. Confirm the inputs with your own cost data.
This guide is general information. Amazon's fees, policies and program rules change and vary by marketplace, so confirm current details in Seller Central and, for tax or legal questions, with a qualified adviser.