How to Lower ACoS on Amazon: 10 Fixes That Actually Work

To lower ACoS on Amazon, either cut the ad spend that does not produce sales or raise the sales you get from the same spend. In practice that means negating search terms that spend without converting, lowering bids on keywords above target, trimming expensive placements, moving budget to proven exact-match keywords, and improving the listing so more clicks turn into orders. Start with wasted spend, because it is usually the fastest win.

ACoS is ad spend divided by ad sales. A campaign that spends $300 to make $1,000 in sales has a 30% ACoS. Every fix below works on one side of that fraction. If you need a refresher, see what ACoS is, or run your numbers through the ACoS calculator.

Step zero: know your target

Lower is not always better. If you cut ACoS from 35% to 15% but sales fall by half, you may make less money. Set a target first. Your break-even ACoS is your profit margin before ad costs. If a product sells for $30 and costs $18 after product cost, Amazon fees, and shipping, your margin before ads is $12, or 40%. Spending more than 40% of sales on ads loses money on every ad sale. Most sellers set a target below break-even to leave room for profit, unless they are deliberately investing in a launch. Our break-even ACoS formula guide covers this in depth.

1. Negate search terms that spend without converting

Download the search term report for the last 30 to 60 days. Sort by spend. Any search term with clicks well past what you would expect to need for a sale, and zero orders, is a candidate for a negative. A practical rule: if a term has more than 1.5 times the clicks you normally need per order and no sales, add it as a negative exact. If your conversion rate is 10%, you need about 10 clicks per order, so a term at 15 clicks with no sale has earned a negative.

Also scan for terms that are clearly irrelevant, such as the wrong product type or a use case your product does not serve. Negate those regardless of clicks. Our full process for this is in cut wasted ad spend on Amazon.

2. Lower bids on keywords above target

For keywords with enough data, a simple formula sets a new bid: new bid = current CPC x (target ACoS / current ACoS). If a keyword's CPC is $1.20, its ACoS is 45%, and your target is 30%, the formula's bid is $1.20 x (30 / 45) = $0.80. That's a 33% cut, so cap this step at 20 to 30% (about $0.90 here) so you do not lose all traffic overnight, then review in a week and move toward $0.80 if ACoS is still above target.

3. Switch weak campaigns to down-only bidding

If a campaign is on Dynamic bids - up and down, Amazon can raise bids by up to 100% at the top of search. On a campaign that is already over target, switching to down only is often the quickest single change you can make. More on the trade-offs in Amazon bidding strategies explained.

4. Fix placement adjustments

Open the Placements tab for each large campaign. If a placement has an adjustment but an ACoS well above target, reduce or remove the adjustment. If one placement converts far better than others, lower the base bid and raise that placement's adjustment instead, so you stop overpaying on the weak placements.

5. Move proven search terms into exact match

Search terms that convert well inside broad, phrase, or auto campaigns usually perform better and more predictably as their own exact-match keywords, where you control the bid precisely. Add the term as exact in a manual campaign, then add it as a negative exact in the source campaign so the two do not compete.

6. Pause the worst targets

Some keywords never become profitable at any reasonable bid. If a keyword has been tested at a bid at or below your calculated max and still runs well above break-even after two to three orders' worth of clicks, pause it. Spending on it is subsidizing a term that does not fit your product.

7. Improve conversion rate on the listing

Conversion rate is the hidden lever in ACoS. If your conversion rate rises from 10% to 13% at the same CPC, your ACoS falls by about 23% with no bid change at all. Check your main image, price, review count and rating, title clarity, and whether you have A+ content. Also confirm you hold the Buy Box, since Sponsored Products ads stop serving when you lose it.

8. Stop pushing products that cannot win

A product with a 3.4-star rating and 12 reviews competing against 4.6-star products with thousands of reviews may never reach a healthy ACoS on generic terms. Sometimes the right fix is to limit spend on that product to branded and long-tail terms while you improve the product or build reviews.

9. Use dayparting if your data supports it

Some products convert noticeably worse at certain hours, often overnight. If your hourly data shows a clear pattern, lowering bids in those hours can trim ACoS. Only do this with enough data to trust the pattern. See Amazon ads dayparting.

10. Make sure you are not misreading the data

Sponsored Products sales are attributed over 7 days for sellers, and recent data is incomplete. If you judge yesterday's ACoS, it will look worse than it really is. Use date ranges that end at least 3 days ago when making bid decisions.

Worked example: a 30-day cleanup

In this hypothetical example the seller negated wasted terms (fix 1), lowered bids on keywords above target (fix 2), and moved winners into exact match (fix 5). Sales went up because budget moved from waste to proven terms, and conversion rate improved because the remaining traffic was more relevant.

What not to do

• Do not slash every bid by 50% at once. You will lower ACoS and kill sales together.
• Do not negate terms after two or three clicks. You need enough data to know a term does not convert.
• Do not judge results within a few days of a change. Give each change about a week.
• Do not forget TACoS. If ad sales help organic rank, a slightly higher ACoS can still grow total profit. Track TACoS (ad spend divided by total sales) alongside ACoS.

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