Category: Amazon PPC

Two numbers come up in almost every Amazon advertising conversation: ACOS and TACOS. They sound similar, but they answer different questions. Reading them together gives you a much clearer view of whether your ads are helping the business.

What is ACOS?

ACOS (advertising cost of sales) is your ad spend divided by the sales Amazon attributes to your ads, shown as a percentage.

ACOS = ad spend ÷ ad-attributed sales × 100

Example: if you spend $200 on Sponsored Products and Amazon attributes $800 of sales to those ads, your ACOS is 25%.

What is TACOS?

TACOS (total advertising cost of sales) divides the same ad spend by your total sales, both from ads and organic.

TACOS = ad spend ÷ total sales × 100

Using the same $200 spend with $2,000 of total sales, TACOS is 10%.

Why look at both?

• ACOS tells you how efficient the ads themselves are.
• TACOS tells you how much of your whole business depends on advertising.
• If ACOS stays steady while TACOS falls over time, organic sales are growing alongside ads.
• If TACOS keeps rising, the business may be relying more and more on paid traffic.

What is a “good” ACOS?

There is no universal number. A sensible target depends on your profit margin, product stage and goals. A common starting point is your break-even ACOS, roughly your profit margin before ad costs: at a 30% margin, an ACOS above 30% loses money on ad-attributed sales. During a launch, sellers often accept a higher ACOS for a period to build sales history.

Practical tips

• Review search-term reports regularly and add irrelevant terms as negative keywords.
• Separate campaigns by match type so you can see what’s working.
• Judge changes over weeks, not days. Attribution and conversion data take time to settle.
• Fix listing problems first: ads amplify a good listing but rarely rescue a weak one.

Want help managing this? See our Amazon PPC Ads Management service ($150/month, ad spend separate).