Amazon ACOS Calculator

ACOS is Amazon’s Advertising Cost of Sales, a key metric used to measure the efficiency of your advertising campaigns on Amazon. It shows how much you spend on ads to generate $1 in revenue. For example, if your ACOS is 20%, it means you are spending $0.20 on ads for every $1.00 earned from sales.

ACOS stands for Advertising Cost of Sales. It is a performance metric used to gauge how much you are spending on advertising relative to your total sales generated from those ads.

The ACOS formula is: (Ad Spend / Ad Revenue) x 100. This calculation shows the percentage of ad spend in relation to the revenue generated from those ads.

To calculate ACOS, divide your total ad spend by your ad revenue, then multiply the result by 100 to get the percentage. For example, if you spent $50 on ads and generated $200 in ad revenue, your ACOS would be (50 / 200) x 100 = 25%.

ACOS (Advertising Cost of Sales) and ROAS (Return on Ad Spend) are closely related metrics used to measure ad performance. ACOS shows the percentage of ad spend relative to revenue, while ROAS reflects how much revenue is earned for each dollar spent on advertising. Essentially, ACOS is ad spend divided by revenue, and ROAS is revenue divided by ad spend. Since these two metrics are directly connected, you can easily convert ACOS to ROAS using our ACOS to ROAS Calculator to understand your advertising efficiency from both perspectives.

ACOS measures the efficiency of your ad spend for sales directly related to advertising. TACOS (Total Advertising Cost of Sales), on the other hand, takes into account total revenue, not just the revenue from advertising. TACOS is a broader measure of the impact of advertising on both organic and paid sales. For a detailed analysis of your overall ad impact, you can use our TACOS Calculator to see how advertising affects both organic and paid sales.

A good ACOS on Amazon typically ranges between 15% to 30%, depending on your business model and goals. For most sellers, an ACOS under 30% indicates efficient spending, while low-margin products often aim for an ACOS between 15% to 20% to maintain profitability.

Breakeven ACOS is the ACOS at which your total ad spend equals your profit margin, meaning you are neither making a profit nor losing money. It helps determine the highest ACOS you can afford before an advertising campaign becomes unprofitable.

The breakeven ACOS formula is: Profit Margin x 100. This formula helps you find the point at which your advertising spend equals your profit margin.

To calculate breakeven ACOS, you need to know your profit margin. For instance, if your profit margin is 30%, your breakeven ACOS would be 30%. This means any ACOS above 30% would lead to losses, while an ACOS below 30% would still be profitable.

Target ACOS is the Advertising Cost of Sales percentage you aim to achieve in order to maintain profitability or meet specific goals like ranking keywords fast. Target ACOS represents the difference between your pre-advertising profit margin and your desired profit margin after factoring in advertising costs.

Note: Target ACOS is NOT the same as TACOS (Total Advertising Cost of Sales). TACOS measures ad spend relative to total revenue.

The Target ACOS formula is: Profit Margin (Before Advertising) – Target Profit Margin (After Advertising). This formula helps determine the percentage of ad spend you can afford while maintaining a specific level of profitability after accounting for advertising. For example, if your product has a 50% pre-advertising margin and you aim for a 20% profit after advertising, your target ACOS would be 30%.

To calculate Target ACOS, subtract your desired post-advertising profit margin from your product’s pre-advertising margin. For instance, if your product has a 50% pre-advertising margin and you want to retain 20% profit after advertising, your target ACOS would be: 50% (Pre-Ad Profit Margin) – 20% (Target Profit Margin) = 30% Target ACOS.

A good target ACOS on Amazon depends on your overall strategy. For profitability, most sellers aim for a target ACOS between 20% and 30%. However, some sellers might aim for a higher target ACOS when prioritizing market share or new product launches, where profitability is secondary.