What is ACOS?
ACOS (advertising cost of sales) is the share of your ad sales that you spent on Amazon ads: ad spend divided by the sales attributed to those ads, as a percentage. An ACOS of 25% means you spent $25 on ads for every $100 of sales they brought in.
Amazon shows ACOS in the campaign manager and in the reports of Sponsored Products, Sponsored Brands and Sponsored Display. A lower ACOS means each sale cost less in ads. On its own, it does not say whether you made money: that depends on your margin, which is why the calculator asks for it.
Only the sales Amazon attributes to your ads count. For Sponsored Products, that is a purchase within 7 days of a click for sellers, and within 14 days for vendors and authors. Sponsored Brands and Sponsored Display use 14 days.
How do you calculate ACOS?
Divide your ad spend by your ad sales, then multiply by 100.
Example: a campaign spent $250, and Amazon attributed $1,000 of sales to it. ACOS = 250 ÷ 1,000 × 100 = 25%.
Use the same period and the same scope for both numbers: one campaign's spend against that campaign's sales, the last 30 days against the same 30 days. Mixing scopes is the most common reason an ACOS looks wrong.
ACOS = ad spend ÷ ad sales × 100
ACOS vs ROAS vs TACoS
ROAS is ACOS turned upside down, and TACoS is ACOS measured against all your sales instead of your ad sales only.
- ACOS = ad spend ÷ ad sales × 100. The lower, the cheaper each ad sale.
- ROAS = ad sales ÷ ad spend. The higher, the better. Amazon writes it as a plain number (4.00), not as a percentage.
- ROAS = 100 ÷ ACOS: an ACOS of 25% is a ROAS of 4, an ACOS of 50% a ROAS of 2.
- TACoS = ad spend ÷ total sales (ads and organic) × 100. It shows what ads cost the whole business, and whether organic sales grow with them.
| ACOS | ROAS | Ad spend per $100 of ad sales |
|---|---|---|
| 10% | 10.00 | $10 |
| 15% | 6.67 | $15 |
| 20% | 5.00 | $20 |
| 25% | 4.00 | $25 |
| 30% | 3.33 | $30 |
| 40% | 2.50 | $40 |
| 50% | 2.00 | $50 |
| 75% | 1.33 | $75 |
| 100% | 1.00 | $100 |
What is a good ACOS?
A good ACOS is one below your break-even ACOS, which equals your profit margin before ads. There is no single good number: a product with a 40% margin makes money at a 30% ACOS, while one with a 15% margin loses money at 20%.
Break-even ACOS = profit before ads ÷ price × 100. If you sell at $30 and keep $9 after product cost, Amazon fees and shipping, your break-even ACOS is 30%. At 30%, the ads eat the whole profit. Below it, you keep the difference.
Your target ACOS sits below break-even, by the margin you want to keep: a break-even of 30% and 10% of the price kept as profit give a target ACOS of 20%. When launching a product, some advertisers accept an ACOS above break-even for a while, to build sales history and organic rank. That is a deliberate investment, best judged with TACoS.
How do you lower your ACOS?
Cut what spends without selling, then pay less for what does sell, in that order.
- Add negative keywords for the search terms that took many clicks and no order. Your search term report lists them.
- Lower the bids of keywords and targets above your target ACOS, and raise them where the ACOS is well below it.
- Move the search terms that sell into exact match, where you set their bid yourself.
- Check your placements. Top of search often converts best, and often costs the most: set the placement adjustments from your own numbers.
- Raise your conversion rate: a clearer main image, title and price bring more sales per click, which lowers the ACOS at the same bid.
- Judge on enough data. A keyword with three clicks and no sale has not failed yet.
Why does my ACOS change after a few days?
Because sales arrive after the clicks. Amazon credits a purchase to the day of the click, up to 7 or 14 days later, and Sponsored Products sales can take up to 48 hours to appear. So the last few days always look more expensive than they will end up.
Judge a day's ACOS a week or two later, once its sales are in, never on the day itself.