The advertising cost of sale (ACoS) is a key indicator to track your success when selling on Amazon. It indicates how effectively your ads are converting into sales, which reveals the true efficiency of your ad spend.
Understanding ACos: Your key to Amazon ad efficiency
In this blog, we will take a look at the fundamentals of ACoS, so you can maximise the efficiency and profitability of your advertising.
First of all, what is it exactly? The Advertising Cost of Sale (ACoS) measures the success of your Amazon advertising efforts. In other words, ACoS shows you how well the money you are spending on ads is translating into sales.
Here’s the formula:
To illustrate, if you invest $50 in ads and generate $100 in sales, your ACoS would be 50%.
Simply put, the lower the percentage, the more efficient your ads. In other words, the lower your ACoS, the more sales you´re getting for every dollar spent on advertising, and the more your efforts are paying off.
Understanding and applying the information you get from ACoS, optimizing your campaigns, maximize your ROI, and grow your Amazon business.
So… What is an ideal ACoS?
ACoS Benchmarks
An ACoS below 25% is considered optimal (ideal), indicating strong conversion performance for the associated keyword or product. In this range, you could make small tweaks to improve sales while maintaining efficiency.
With an ACoS in the mid-range, between 25% and 40%, there is some room to optimise. Consider increasing your bids strategically to drive additional clicks and expand overall traffic.
However, when your ACoS climbs above 40%, you are definitely going to have to consider making some changes. It usually means a target is driving lots of traffic but isn’t converting well. Take some time to rethink which keywords deserve your budget and attention.
However, ACoS doesn’t necessarily say it all. It can vary by industry standards, product category and profit margins. A high ACoS doesn’t always mean your product is unprofitable; We must consider a second metric: TACoS (Total Advertising Cost of Sales), which measures the impact of ads, not only on the paid, but also the organic sales.
Key Factors that impact your ACoS
- Product Listing Quality: Use high-quality images, compelling product descriptions, and strategically optimized keywords.
- Keyword Relevance: Precise and relevant keywords will create more engagement with your customers.
- Bid Strategy: This is a dynamic process. Try to continuously adjust bids based on keyword performance, which will increase their efficiency and results.
- Competition: In highly competitive product categories, higher bids may be necessary to maintain visibility, which can lead to increased ACoS.
Strategies to Lower Your ACoS
- Optimize Listings: Improve product titles, bullet points, and images to make your listings more appealing to shoppers, and thus boost conversion rates.
- Refine Keyword Targeting: Make use of tools like DataDive or Cerebro (Helium 10) to discover high-performing keywords that drive relevant traffic.
- Implement Negative Keywords: Improve campaign efficiency by filtering out irrelevant or low-performing search terms, and minimize wasted ad spend.
- Adjust Bids Strategically: Spend your money wisely. Prioritise keywords that deliver strong conversions, and reduce bids on underperforming ones.
- Utilize Dayparting: Schedule your ads to run during peak shopping hours, ensuring maximum visibility when your target customers are most active.
TACoS: How to integrate organic sales with ACoS
While ACoS shows how much you spend on ads compared to the sales from those ads, TACoS looks at your total sales (both paid and organic). Analyzing TACoS helps you understand how your ads impact your overall business, not just the sales directly from the ads. This gives a complete picture of your true profitability and growth.
Here’s the formula in action:
To illustrate, if you invest $50 in ads and generate $100 in sales from Ads (Paid sales) and have organic sales of $200, this means your Total sales (Paid +Organic): $100 + $200 = $300
Calculate TACoS:
Interpretation:
A TACoS of 16.67% means that 16.67% of your total sales revenue (including both paid and organic sales) was spent on advertising. This helps you understand the overall impact of your ads on your entire sales performance. Monitor TACoS to ensure a balance between ad spend and organic sales growth, and ultimately in brand growth.
Interpreting ACoS and TACoS Together: Key scenarios
This table shows what each combination of ACoS and TACoS might mean for your advertising strategy and overall business health.
| Scenario | Interpretation |
| Low ACoS & Low TACoS | Efficient ads + strong overall sales growth — Ideal scenario |
| Low ACoS & High TACoS | Efficient ads but overall sales growth is weak — Check organic sales |
| High ACoS & Low TACoS | Ads costly but contributing to organic sales — Review ad efficiency |
| High ACoS & High TACoS | Ads costly with weak organic sales growth — Optimize strategy urgently. |
Advanced optimization techniques
By continuously using available data and testing while calculating and implementing AcoS and TACoS to improve your campaigns, you can definitely make the most of your budget. Ultimately, the goal is to improve your brand’s visibility on Amazon and even beyond, so you get more value from your ads. Here are the most effective optimization strategies:
- Dynamic Bidding: Take advantage of Amazon’s dynamic bidding capabilities. They allow you to adjust your bids in real time, optimizing for the likelihood of conversion, and maximizing ad efficiency.
- A/B Testing: Conduct systematic experiments with various ad creatives and targeting parameters to determine which combinations deliver the best performance and return on investment.
- Portfolio Management: Structure your advertising campaigns into portfolios to streamline performance tracking and enable more effective budget allocation across product lines or objectives.
- Leverage Amazon DSP: Utilize Amazon’s Demand-Side Platform (DSP) to extend your advertising reach beyond Amazon’s marketplace through targeted display ads, enhancing brand awareness and customer acquisition.
Tools for ACoS optimization
Using the right diagnostic tools, you can increase the efficiency of your ads. DataDive offers robust keyword research and performance tracking, while the Amazon Advertising Console provides comprehensive campaign management and detailed reporting. You can also use third-party platforms, like Helium 10 and Sellics, as they offer advanced analytics and optimization tools to help you optimize your ad efficiency.
Frequently Asked Questions About ACoS and TACoS
What’s a good ACoS to aim for?
In general, an ACoS below 25 percent is considered strong. It usually means your ads are performing well and converting clicks into sales efficiently. But the “right” ACoS depends on your margins and goals. Some sellers are fine with a higher ACoS if it helps them rank better or acquire new customers. Others need to stay under 20 percent to stay profitable. It really comes down to how your business is structured.
How do I calculate ACoS again?
It’s pretty simple:
ACoS = (Ad Spend ÷ Ad Sales) × 100
So if you spend $50 on ads and make $100 in sales from those ads, your ACoS is 50 percent. The lower the number, the more efficient your ad spend.
What’s the difference between ACoS and TACoS?
ACoS only looks at the sales that come directly from ads. TACoS, on the other hand, compares your ad spend to all of your sales, including organic ones. That gives you a much clearer picture of how your ads are supporting your business overall. A low TACoS means your ads are doing more than just driving sales—they’re helping lift your organic visibility too.
Is a high ACoS always a bad thing?
Not always. If you’re launching a new product or trying to rank for a competitive keyword, you might accept a higher ACoS in the short term. But if your ACoS stays high over time and your TACoS isn’t improving, that’s a red flag. It could mean your ads are generating clicks but not converting well—or they’re not supporting long-term growth.
How often should I check or adjust my campaigns?
You don’t need to check them every day, but reviewing your campaigns once a week is a good rhythm. If something looks off, give it at least 7 to 10 days of data before making changes. Amazon ads need time to collect enough performance data. Making adjustments too quickly can actually set you back.
What tools can help me manage ACoS and TACoS?
There are several helpful tools out there.
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Helium 10 offers tools like Cerebro and Adtomic for keyword research and bid optimization.
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DataDive gives you deeper insights into market and keyword performance.
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Amazon’s Advertising Console is a must for tracking results and making day-to-day adjustments.
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If you want more automation, platforms like Sellics and Perpetua help you manage large campaigns with AI-based recommendations.
Why does TACoS matter more over time?
Because it tells you how your ads are impacting your business as a whole. If your ACoS is high but your TACoS is dropping, that’s actually a good sign. It means your ads are helping generate more organic sales—which are the most profitable kind. So even if ads cost more at first, they can pay off by lifting your organic rank and increasing long-term growth.
Conclusion
The metrics ACoS and TACoS are useful tools to guide your advertising strategy to become more profitable by making your ad spending more efficient. As they will fluctuate, it is important to review and adjust your campaigns regularly, based on real performance data.
By taking into account, and balancing both ACoS and TACoS, you ensure your advertising efforts will reach their ultimate goal: increasing not only paid sales, but also organic ones. Additionally, staying informed about Amazon’s evolving advertising features and best practices is essential to maintaining a competitive edge in this dynamic marketplace.
By implementing these metrics, while maintaining an attitude of ongoing learning and adjustment, sellers can maximize ROI and sustain long-term success on Amazon.
Want Lower ACoS and Higher Profits on Amazon?
You’ve learned how ACoS and TACoS work—and why both metrics matter. But knowing is only half the battle. Real success comes from applying that insight to a tailored strategy that fits your brand, your products, and your growth goals.
That’s where we come in.
At BellaVix, we specialize in helping Amazon sellers reduce wasted ad spend, boost organic rankings, and turn paid campaigns into sustainable brand growth. Whether you’re spending $2,000 a month or $200,000, our team knows how to make every dollar work harder with smart optimization and full-funnel insights.
By filling out the form below, you’ll get a chance to connect with an Amazon expert who can review your current ACoS, TACoS, and campaign structure—and offer actionable next steps to improve performance right away.
No guesswork. No gimmicks. Just strategy that works.
Ready to scale smarter? Fill out the form below and let’s lower your ACoS—and raise your ROI.