What is TACoS on Amazon?
TACoS (total advertising cost of sales) is your Amazon ad spend divided by your total sales, ad sales and organic sales together, as a percentage. A TACoS of 10% means your ads cost $10 for every $100 you sold in total.
Where ACOS judges your ads against the sales they brought, TACoS judges them against the whole business. The two inputs come from two places: the ad spend from the Amazon Ads console, the total sales from Seller Central, Vendor Central or KDP, over the same period.
How do you calculate TACoS?
Divide your ad spend by your total sales for the same period, then multiply by 100.
Example: in a month, you spent $500 on ads and sold $5,000 in total, $2,000 of it through ads. TACoS = 500 ÷ 5,000 × 100 = 10%. Your ACOS that month is 500 ÷ 2,000 × 100 = 25%.
TACoS = ad spend ÷ total sales (ads + organic) × 100
ACOS vs TACoS
Same ad spend, different denominator: ad sales for ACOS, all sales for TACoS.
- ACOS = ad spend ÷ ad sales × 100. It tells whether the ads pay for themselves.
- TACoS = ad spend ÷ total sales × 100. It tells what the ads cost the whole business.
- TACoS is never higher than ACOS, because total sales include ad sales. If yours is, the two figures do not cover the same period or the same products.
- TACoS ÷ ACOS is the share of your sales that comes from ads: 10% ÷ 25% = 40% in the example above.
What is a good TACoS?
There is no universal good TACoS. What matters is where it goes over time: a TACoS that stays flat or falls while total sales grow means organic sales grow along with the ads.
A TACoS that rises while total sales stay flat means the ads are buying sales you would have made anyway, or that organic rank is slipping and the ads are filling the gap.
Keep it well below your margin before ads: TACoS is what advertising costs the whole business, so the margin left after it has to pay for everything else.
How do you lower your TACoS?
Either spend less on ads that do not grow sales, or grow the sales that ads do not pay for.
- Cut wasted spend: add negatives for search terms that take clicks and never sell.
- Lower the bids of targets above your target ACOS.
- Check whether the ads on your own brand name bring sales you would get organically anyway.
- Grow organic sales: a better listing, a competitive price and the ranking that ad sales help build.
Why TACoS matters during a launch
During a launch, ACOS is often high on purpose: you pay for the first sales a new product needs. ACOS alone cannot tell whether that pays off; TACoS can.
If organic sales follow, total sales grow faster than ad spend and TACoS falls, even while ACOS stays high. If TACoS keeps rising week after week, the launch is buying sales and nothing more.