What Is a Good ACoS for Amazon PPC? Your Advertising Guide

Why there's no single "good" ACoS

ACoS (Advertising Cost of Sale) is ad spend divided by ad-attributed sales. A 30% ACoS is disastrous on a product with 20% margin, and comfortable on one with 55% margin. Benchmarks you see quoted online average across categories with wildly different margins, which is why they rarely apply cleanly to your account.

Find your break-even ACoS first

Your break-even ACoS is roughly your gross margin before advertising costs. Spend above that on a sustained basis and ads are subtracting from profit rather than adding to it. Use the ACoS and TACoS calculator to get your number from your own spend, sales and margin.

Then decide your target relative to break-even

• Below break-even: profitable growth - the zone most "maintain" and "reduce" strategies aim for.
• At break-even: acceptable for a launch phase, where the goal is rank and reviews rather than immediate profit.
• Above break-even, briefly: sometimes justified to clear aging stock or push a launch, but not sustainable.

Watch TACoS too

ACoS only measures ad-driven sales. TACoS (ad spend ÷ total sales including organic) tells you whether advertising is growing your whole business or just recycling spend into sales you'd have gotten anyway. A falling TACoS over time, even with a flat ACoS, usually means your organic rank is doing more of the work.

Automating around your number

Once you know your target, the daily work is holding bids inside a band around it - the exact job target ACoS automation is built for.

Work it out for your own product

Break-even ACoS equals your gross margin before ad costs. Take the selling price, subtract landed product cost, Amazon referral fees and fulfilment, and divide what remains by the selling price. A $30 product with $12 of cost and $6 of fees leaves $12 — a 40% break-even ACoS. Any sustained ACoS under 40% is adding profit; above it, advertising is spending margin you have already earned. The ACoS calculator does this in a few seconds.

Good ACoS by situation, not by industry

• New product, first 8 weeks: ACoS at or above break-even is a rational purchase of rank and reviews. Cap the total spend and the end date instead of the ratio.
• Established product: target roughly 8-15 points under break-even. That leaves real profit without surrendering the placements that feed organic sales.
• Branded defence: ACoS here is flatteringly low and close to meaningless. Judge these campaigns on new-to-brand orders and on what a competitor would pay to sit above you.
• Clearance or ageing stock: an ACoS above break-even can be cheaper than long-term storage. Decide with total cost, not the ratio.
• Seasonal peak: accept a higher ACoS for the weeks when conversion rate is highest; the same bid buys a better outcome in November than in February.

Why category benchmarks mislead

A "20% ACoS is good for home goods" style benchmark ignores the only variable that decides the answer: your margin. Two sellers in the same category with 45% and 18% margins have break-even points 27 points apart. If you must compare to something, compare your own account month over month, and compare TACoS rather than ACoS — it is the figure that shows whether advertising is building the business or just renting sales.

Signs your target is wrong

• ACoS hit the target but revenue fell: the target is too tight and you bought it with volume.
• ACoS stable, TACoS rising: advertising is replacing organic sales rather than adding to them. Check branded terms first.
• ACoS far under target: you are under-bidding. Unused headroom is not a saving; it is growth going to a competitor.
• ACoS above break-even for months: the constraint is usually conversion rate, price or search-term quality — not bids.

Frequently asked questions