What Is ACoS on Amazon? Formula, Examples, and How to Use It

ACoS (advertising cost of sales) is the percentage of ad-attributed sales you spent on advertising. The formula is ad spend divided by ad sales, times 100. If you spent $50 on ads and those ads produced $200 in sales, your ACoS is 25%.

It's the headline metric in the Amazon Ads console and the number most sellers use to judge campaigns. Used well, it tells you whether a keyword is paying for itself. Used badly, it can push you to starve the ads that are actually growing your business.

The ACoS formula

ACoS = (Ad spend / Ad sales) x 100

• Ad spend is the total cost of clicks (or impressions, for vCPM campaigns) in the period.
• Ad sales is the revenue Amazon attributes to your ads in the same period, within the attribution window for that ad type.

You can calculate it at any level: account, campaign, ad group, keyword, or search term. Our ACoS calculator does the arithmetic if you'd rather not.

Worked examples

The campaign ACoS of 32.7% hides a very good keyword, a costly one, and one with no sales at all. Always look below the campaign level before deciding what to change.

What a 'good' ACoS depends on

There's no universal good ACoS. A 40% ACoS is profitable for a product with 55% margins and a loss for a product with 25% margins. The right comparison is your break-even ACoS, which equals your profit margin before ad costs.

• ACoS below break-even: each ad sale is profitable.
• ACoS equal to break-even: ad sales roughly cover their cost, with no profit.
• ACoS above break-even: you lose money on each ad sale, which can still make sense during a launch or to win a strategic keyword.

We go deeper on choosing a target in what is a good ACoS on Amazon.

What drives ACoS up or down

ACoS can be rewritten as CPC divided by (conversion rate x average order value). That shows the three levers you control:

Example of the levers at work

Your CPC is $1.00, conversion rate is 10%, and price is $25. ACoS = $1.00 / (0.10 x $25) = 40%. If you improve conversion to 12% by fixing your main image, ACoS falls to $1.00 / (0.12 x $25) = 33.3% without touching a bid. If you instead cut CPC to $0.80, ACoS becomes 32%, but you'll likely get fewer impressions.

ACoS in the Amazon Ads console

The console shows ACoS in the campaign manager columns for Sponsored Products, Sponsored Brands, and Sponsored Display. A few details matter:

• Attribution windows differ. For sellers, Sponsored Products credits sales within 7 days of a click; Sponsored Brands and Sponsored Display use 14 days. See the attribution window explained.
• Recent days look worse. Sales keep arriving for days after a click, so the last few days of ACoS usually fall as late sales come in.
• Sponsored Products sales include purchases of other products from your brand (halo sales), not only the advertised item. Reports separate advertised-SKU sales from other-SKU sales.

Using ACoS to make bid decisions

A simple, defensible rule set for keywords with enough data (say 15 or more clicks):

• ACoS more than 20% above target: lower bid 10% to 20%.
• ACoS within 20% of target: leave it.
• ACoS more than 20% below target and impressions are limited: raise bid 10% to 15%.
• 15+ clicks and zero orders: lower bid sharply or pause, and check the search terms behind it.

Or calculate the bid directly: target bid = target ACoS x conversion rate x average order value. With a 30% target, 10% conversion, and $25 price, your bid ceiling is $0.75. Our PPC bid calculator runs this for you.

What ACoS tells you at each level

Common reasons ACoS is high

When ACoS sits above target, work through the causes in this order before cutting bids across the board:

1. Irrelevant search terms. Check the search term report for clicks that could never convert, and add them as negatives.
2. Bids above what the keyword can support. Compare each keyword's CPC with its maximum profitable bid.
3. Weak conversion. If CTR is fine but conversion is low, the listing (price, images, reviews) is the problem, not the ad.
4. Expensive placements. Top of search often costs more; check whether its conversion rate justifies the price.
5. Recent data. If you're looking at the last three days, wait for attribution to catch up.

Fixing the first item alone often brings ACoS down noticeably, because wasted clicks add spend with no sales to offset it.

When a high ACoS is fine

Some campaigns are meant to run above target. A launch campaign buying early sales, a defensive campaign on your own brand name against aggressive competitors, or a test of a new keyword theme can all justify a higher ACoS for a limited time. The key is to label those campaigns clearly, give them an end date or a spend cap, and judge them against their own goal rather than the account average.

Where ACoS falls short

ACoS only looks at ad-attributed sales. It ignores organic sales that ads help create, repeat purchases, and the long-term value of ranking for a keyword. A brand that cuts every keyword above target ACoS can watch its ACoS improve while total sales shrink. That's why many sellers pair ACoS with TACoS, which divides ad spend by total sales. See how it relates to the other efficiency metric in ACoS vs ROAS.

Tools like AdSpark adjust bids continuously toward the target ACoS you set for each product, which removes the daily manual math while keeping you in control of the goal.

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