How to Use This Calculator
Calculate your Amazon ACOS, ROAS, and break-even point in under 30 seconds—and know exactly if your ads are profitable.
Enter Your Ad Spend & Revenue
Input your total ad spend and the revenue attributed to those ads. You can find these in your Amazon Campaign Manager.
Add Your Product Economics
Enter your average selling price and total product cost (including Amazon fees) to calculate your break-even ACOS.
Review Your Results
See your ACOS, ROAS, and whether you're above or below break-even. If ACOS < Break-Even ACOS, you're profitable!
Optional: Add Organic Revenue for TACoS
In Advanced Options, add your organic revenue to calculate TACoS—a better long-term metric for overall ad efficiency.
Pro Tip: Use our Amazon FBA Calculator first to determine your true product cost including all Amazon fees.
Why ACOS Matters for Amazon Sellers
ACOS (Advertising Cost of Sale) is the single most important metric for Amazon PPC profitability. It tells you what percentage of your ad revenue goes to advertising costs—and directly determines whether you're making or losing money on every ad-attributed sale.
But here's what most sellers get wrong: they optimize for a "low ACOS" without knowing their break-even point. A 25% ACOS might be great for one product (50% margin) and disastrous for another (15% margin). Without knowing your break-even ACOS, you're flying blind.
The Break-Even Blind Spot
62% of Amazon sellers don't know their break-even ACOS. They optimize for arbitrary targets like "under 30%" while unknowingly losing money—or leaving profitable scale on the table.
This calculator solves that problem. Enter your product economics, and you'll instantly see your exact break-even ACOS—the maximum you can spend on ads while still making profit. Then compare it to your actual ACOS to know if you should scale up or optimize.
Understanding ACOS, ROAS, and TACoS
Amazon advertising has several key metrics. Understanding how they relate is crucial for making smart optimization decisions.
ACOS (Advertising Cost of Sale)
ACOS shows what percentage of your ad revenue goes to advertising. It's Amazon's native metric and the inverse of ROAS.
ACOS Quick Reference
ROAS (Return on Ad Spend)
ROAS is the inverse of ACOS, expressed as a multiplier. A 4x ROAS means you earn $4 for every $1 spent on ads. It's the same metric Facebook and Google use, making cross-platform comparison easier.
Break-Even ACOS
Your break-even ACOS equals your profit margin percentage. If your margin is 30%, your break-even ACOS is 30%. Any ACOS below this is profitable; any ACOS above means you're losing money on ads.
TACoS (Total Advertising Cost of Sale)
TACoS measures ad spend against your total revenue (not just ad-attributed revenue). It shows how efficiently ads drive your overall business, including the "halo effect" on organic sales.
Healthy TACoS
5-15%
Ads efficiently supporting total sales
Ideal TACoS Trend
Decreasing
Same ACOS + lower TACoS = organic growth
ACOS Formulas
Here are the core formulas for calculating Amazon advertising efficiency. Understanding these helps you make better optimization decisions.
ACOS (Advertising Cost of Sale)
The percentage of ad revenue spent on advertising. If you spend $100 and generate $400 in ad sales, your ACOS is 25%.
ACOS = (Ad Spend / Ad Revenue) × 100ROAS (Return on Ad Spend)
How many dollars you earn per dollar spent on ads. The inverse of ACOS as a percentage—4x ROAS equals 25% ACOS.
ROAS = Ad Revenue / Ad SpendBreak-Even ACOS
Your maximum ACOS before losing money. This equals your profit margin percentage. Include all costs: COGS + Amazon fees + shipping.
Break-Even ACOS = ((Selling Price − Product Cost) / Selling Price) × 100Ad Profit
Your actual profit from advertising after accounting for product costs and ad spend. Positive = profitable ads.
Ad Profit = (Ad Revenue × Profit Margin%) − Ad SpendTACoS (Total Advertising Cost of Sale)
Ad spend as a percentage of ALL revenue (ads + organic). A better metric for long-term advertising efficiency.
TACoS = (Ad Spend / Total Revenue) × 100Real-World ACOS Examples
Let's walk through three scenarios to see how ACOS relates to profitability across different product margins.
Example 1: High-Margin Product
Supplement Brand (45% Margin)
Ad Spend: $500, Ad Revenue: $2,000, Selling Price: $29.99, Product Cost: $16.49
Example 2: Moderate-Margin Product
Kitchen Gadget (30% Margin)
Ad Spend: $300, Ad Revenue: $1,000, Selling Price: $24.99, Product Cost: $17.49
Example 3: Low-Margin Product (Losing Money)
Phone Accessory (20% Margin)
Ad Spend: $200, Ad Revenue: $500, Selling Price: $14.99, Product Cost: $11.99
Amazon ACOS Benchmarks by Category
ACOS varies significantly by product category, competition level, and advertising strategy. Here are typical ranges:
| Scenario | ACOS Range | Strategy |
|---|---|---|
| Top Performers | 10-20% | Highly optimized, exact match keywords |
| Average Seller | 25-35% | Mixed targeting, ongoing optimization |
| New Product Launch | 40-50% | Aggressive for ranking, temporary loss |
| Brand Awareness | 50%+ | Intentionally high for visibility |
| Competitive Categories | 30-45% | Electronics, supplements, beauty |
Remember: These are averages, not targets. Your target ACOS should be based on YOUR profit margin (break-even ACOS), not industry benchmarks. A 35% ACOS is great for a 50% margin product but terrible for a 25% margin product.
Common ACOS Mistakes
Avoid these costly errors that sabotage Amazon advertising profitability:
Chasing Low ACOS at Any Cost
Optimizing purely for low ACOS often means under-spending and missing profitable sales. A 15% ACOS with $500 profit is worse than 25% ACOS with $2,000 profit. Use our PPC Budget Calculator to plan optimal spend based on your revenue goals.
Not Knowing Break-Even ACOS
Without knowing your break-even point, you can't know if you're profitable. Calculate your product margin first (use our FBA Calculator), then your break-even ACOS equals that margin percentage.
Ignoring TACoS
ACOS only shows direct ad performance. TACoS reveals whether ads are boosting organic sales (halo effect). Stable ACOS with declining TACoS = ads improving organic ranking. Track both metrics.
Using One ACOS Target for All Products
Products have different margins, so they need different ACOS targets. A 25% ACOS target might be profitable for your high-margin supplement but unprofitable for your low-margin accessory. Calculate targets per product.
Pausing Profitable Keywords
A keyword with 40% ACOS might "seem high" but if your break-even is 50%, it's profitable! Sellers often pause winning keywords because they don't understand their true break-even point.
How to Optimize Your Amazon ACOS
Proven strategies to lower ACOS while maintaining or increasing total ad profit:
Negative Keyword Mining (Weekly)
Download your search term report weekly. Add non-converting and irrelevant terms as negative keywords. This alone can cut ACOS by 10-20% by eliminating wasted spend.
Shift Budget to Proven Converters
Identify your top-converting search terms and move them to exact match campaigns with higher bids. Use our PPC Budget Calculator to plan how much to allocate. Exact match typically has 20-30% lower ACOS than broad match.
Improve Listing Conversion Rate
The same traffic converts better with better listings. Upgrade your main image, add video, improve bullet points, and get more reviews. A 1% conversion rate increase can reduce ACOS by 20-30%.
Lower Bids (Don't Just Pause)
High-ACOS keywords might still be profitable at lower bids. Instead of pausing, reduce bids by 20-30% and monitor. You may find a profitable bid level instead of losing the keyword entirely.
Dayparting & Placement Adjustment
Analyze when your conversions happen and adjust bid modifiers. Increase bids for top-of-search if it converts better. Some sellers see 20% ACOS improvement from placement optimization alone.
ACOS vs TACoS: Which Metric Matters More?
Both metrics serve different purposes. Understanding when to use each is key to smart Amazon advertising decisions.
When ACOS Matters Most:
- •Evaluating individual campaign performance
- •Keyword-level optimization decisions
- •New products without organic sales yet
- •Short-term profitability analysis
- •Comparing similar ad campaigns
When TACoS Matters Most:
- •Measuring total advertising efficiency
- •Long-term brand building strategy
- •Tracking organic rank improvement from ads
- •Established products with organic sales
- •Overall business health assessment
The Golden Ratio
Stable ACOS + Declining TACoS = Success. This means your ads are maintaining efficiency while driving more organic sales. Your advertising is building long-term value.
If both ACOS and TACoS are increasing, you're becoming less efficient. If both are declining, you may be under-investing in growth. Track both metrics together for the complete picture.
Bottom Line: Use ACOS for day-to-day optimization. Use TACoS to measure whether advertising is building your brand. Use our ROAS Calculator to compare Amazon performance with other advertising platforms.
Frequently Asked Questions
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