What is ACOS (Advertising Cost of Sale)?
Advertising Cost of Sale (ACOS) is an Amazon-specific advertising metric that shows what percentage of attributed sales revenue was spent on advertising. ACOS = (Ad Spend ÷ Ad Sales) × 100. If you spent $100 on ads and generated $400 in ad-attributed sales, your ACOS is 25%.
Why It Matters
ACOS is the primary metric used to evaluate Amazon PPC profitability. Understanding your break-even ACOS and target ACOS is essential for determining whether campaigns are profitable and how aggressively to spend. ACOS is deeply tied to product margin — the same ACOS can be extremely profitable for one product and loss-making for another.
How It Works
Break-even ACOS = your product’s profit margin percentage. If your margin (after all COGS, FBA fees, and overhead) is 35%, an ACOS below 35% is profitable. Target ACOS is typically set at 60–70% of break-even to ensure a profit buffer. In competitive categories or during product launches, sellers sometimes accept ACOS above break-even intentionally to build organic ranking and sales velocity — investing short-term for long-term returns. ACOS must be distinguished from TACOS (Total ACOS), which accounts for all Amazon sales (not just ad-attributed sales) against total ad spend.
Real-World Example
An Amazon seller with 40% product margin runs Sponsored Products. Their campaign ACOS is 22%, significantly below their 40% break-even. Every ad dollar generates profitable returns. They increase the budget by 30% to capture more market share while maintaining profitability. A second campaign shows ACOS of 58%, near break-even — still acceptable during a new product launch phase but earmarked for optimization.
