ACoS

ACoS (advertising cost of sales) is your Amazon ad spend divided by the sales attributed to those ads, expressed as a percentage. If you spent $300 on ads and those ads produced $1,000 in sales, your ACoS is 30%.

Why it matters

ACoS tells you how efficiently a campaign turns spend into revenue, but it says nothing about profit on its own. A 30% ACoS is excellent for a product with a 45% margin and a loss for a product with a 25% margin. The number to compare it against is your break-even ACoS, which is simply your profit margin before advertising.

What moves it

• Conversion rate is the biggest lever. A listing that converts 12% of clicks instead of 8% lowers ACoS by a third at the same bids.
• Bids and placements set the cost per click. Top-of-search placements convert better but cost more.
• Search-term relevance decides how many clicks are wasted. Negative keywords remove the spend that never converts.
• Campaign goal. A launch campaign runs a high ACoS on purpose to win rank; a mature product should not.

How we use it

We never optimise ACoS in isolation. It is read next to TACoS, which shows whether ads are growing total sales or just replacing organic ones, and against the target the strategy sets for that product.