What is ACoS? How to calculate it, and what a good ACoS is for you

ACoS is Amazon's main efficiency number for its own ads, such as Sponsored Products and Sponsored Brands. Amazon defines it as ad spend as a percentage of the sales your ads are credited with. For Sponsored Products that's sales of the promoted products; for Sponsored Brands it's sales across your brand.

"Credited with" matters. A sale counts toward ACoS when a shopper clicks your ad and buys within the attribution window: 7 days after the click for Sponsored Products, 14 days for Sponsored Brands. Sales from shoppers who never clicked an ad don't count, even if an ad was the reason they came.

Lower is more efficient: you're paying less in ads for each dollar of credited sales. But lower isn't always better, as we'll see.

ACoS = ad spend ÷ ad-attributed sales × 100

A campaign that spent $300 and was credited with $1,200 of sales has an ACoS of $300 ÷ $1,200 = 25%. Amazon shows the same calculation in the ACOS column of Campaign Manager, for any date range. The ACoS calculator does it for you and checks the result against your break-even.

Work it out per campaign, not just for the account. Totals hide campaigns that lose money behind ones that make it:

ACoS and ROAS (return on ad spend) are the same measurement turned upside down. ROAS is credited sales ÷ ad spend, so ACoS = 1 ÷ ROAS. Amazon reports ACoS; Meta and Google report ROAS. Converting between them lets you compare.

Your break-even ACoS is your profit margin before ads. If each sale keeps 40% of the price after product cost and Amazon fees, you can spend up to 40% of the sale on ads before it starts losing money.

profit before ads = price − product cost − referral fee − FBA fee − other costs
break-even ACoS   = profit before ads ÷ price
target ACoS       = break-even ACoS − the margin you want to keep

A made-up product:

• Price $30. Product cost $7.50, a 15% referral fee of $4.50, an FBA fee of $5 and $1 of other costs.
• Profit before ads: $12. Break-even ACoS: $12 ÷ $30 = 40%.
• To keep a 10% margin after ads, the target ACoS is 40% − 10% = 30%.

Against that, the campaigns above read differently. Brand keywords at 10% are comfortably profitable, category keywords at 40% only break even, and competitor targeting at 50% loses money on every credited sale. The break-even ROAS and ACoS calculator works this out from your own costs. Referral fees vary by category; check yours on Amazon's current fee schedule.

There's no single good ACoS. Amazon's own advice is that successful ACoS levels vary for each seller, and that you should set a target from your margins. A 30% ACoS is a loss on a product with a 20% margin and a healthy profit on one with a 50% margin.

So start from break-even, then decide how far below or above it each campaign should run:

• Below break-even when the goal is profit today, or when stock is short and you don't want ads selling out what organic sales would have sold. The reorder point and ad pacing calculator helps with the second.
• Above break-even, on purpose, when launching a product, or when new customers reorder. A first order that loses money can pay back over later ones. The max allowable CAC calculator shows how much a new customer is worth paying for.

Either way, the choice should be deliberate and written down, not a number copied from someone else's account.

ACoS only looks at credited sales. TACoS (total advertising cost of sales) divides ad spend by all your sales, including organic ones. If the campaign above with $300 of spend and $1,200 of credited sales sits in a store selling $4,000 in total, its ACoS is 25% and its TACoS is 7.5%.

TACoS shows how much of the business depends on ads. If it falls while total sales grow, ads are helping organic sales too. The TACoS calculator also works out blended TACoS with Meta and other ad spend included.

ACoS measures credit, not cause. Two gaps matter most:

• Sales that would have happened anyway. A shopper who searches your brand name and clicks your ad on the way to buying was probably going to buy. Brand keyword campaigns often show the lowest ACoS for that reason. Some of their credited sales would have come through the organic listing for free.
• Sales caused by ads outside Amazon. When a Facebook or Instagram ad sends someone to search Amazon for your brand, the sale may show up as organic, or be credited to a Sponsored Products click on your brand name. ACoS on Amazon looks better, and the Meta ad that started it gets nothing. See Facebook ads for Amazon.

The way to know what ads cause is a test with a holdout group: turn ads off for some shoppers or regions and compare. That gives an incremental ACoS (ad spend ÷ the sales the ads caused), which can be much higher or lower than the reported one. Read what incrementality is and how lift is calculated, and use the incremental ROAS calculator to turn a test result into numbers.

• Find the campaigns above break-even first. Sort by ACoS and compare each one with your break-even, not with the account average.
• Cut search terms that spend without selling. Add them as negative keywords, or lower their bids.
• Improve the listing. Better images, a clear title and reviews raise the conversion rate, which lowers ACoS at the same cost per click.
• Give changes time. Amazon suggests watching ACoS for at least two weeks after changes, because sales take time to show up in reports.
• Don't just switch off brand keywords to lower spend. Some of those sales are real, especially where competitors bid on your name. Test it on a few products before deciding.