What does a 20% ACoS mean on Amazon?

A 20% ACoS means you spent £20 in advertising for every £100 of ad-attributed sales. Whether 20% is good or bad depends entirely on your margin. If your profit margin before ads is 40%, a 20% ACoS leaves you with a 20% profit on ad sales, which is healthy. If your margin before ads is 18%, a 20% ACoS means advertising is losing money on each sale.

Is a lower ACoS always better?

Not always. A very low ACoS often means your campaigns are too conservative: you are winning only easy, low-competition auctions and leaving significant sales volume on the table. During a product launch, a higher ACoS is often the right choice because ranking improvement and review generation are worth more than the immediate advertising profit margin. Once the product is established, a lower ACoS reflects better campaign efficiency.

What is the average ACoS on Amazon?

Industry data generally puts average Amazon Sponsored Products ACoS between 20% and 35%. This average spans all categories, product stages and seller strategies and is not a useful target in itself. Your target ACoS should be calculated from your own product margin rather than benchmarked against an industry average, because a 30% ACoS is profitable for one product and loss-making for another depending on their respective margins.

How does ACoS relate to ROAS on Amazon?

ACoS and ROAS (Return on Ad Spend) are two ways of expressing the same relationship between ad spend and ad revenue. ROAS = ad revenue divided by ad spend. ACoS = ad spend divided by ad revenue, multiplied by 100. A 25% ACoS is equivalent to a 4x ROAS. Amazon's advertising console reports both. ACoS is more commonly used by Amazon sellers because it relates directly to margin percentage, making it easier to compare against break-even.

What is a good ACoS on Amazon?

A good ACoS on Amazon is one that falls below your break-even point and still delivers the profit margin you need. There is no single universal target: the right ACoS for any campaign depends on your product's profit margin, whether you are launching or scaling, and the goal you have set for that specific campaign. ACoS stands for Advertising Cost of Sales. It measures what percentage of your ad-attributed revenue was spent on the ads that drove it. The formula is simple: divide your total ad spend by your total ad-attributed sales, then multiply by 100. If you spent £20 on ads and those ads produced £200 in sales, your ACoS is 10%. ACoS is a campaign-level metric that Amazon calculates from the spend attributed to a specific set of keywords or targets and the sales those ads directly generated. It does not account for organic sales, overall product margin, or the longer-term value of ranking improvements and reviews that advertising can drive. An ACoS is good when it falls below your break-even point and leaves enough margin to cover all other costs and generate a profit. Your break-even ACoS is your net profit margin before ad costs, expressed as a percentage. If your product costs £10 to manufacture and fulfil and sells for £40, your gross margin is 75% and your break-even ACoS is 75%. Any ACoS below 75% on that product means advertising is profitable. An ACoS above your break-even does not always mean the campaign is failing. For a new product, spending above break-even in the short term can be justified if it is buying sales rank, review velocity and indexation for competitive keywords. Once the product has established organic visibility, the campaign should be tightened toward a profitable ACoS. The right ACoS target changes as a product moves through its lifecycle. During launch, a higher ACoS is expected and often deliberate. As the product matures and generates organic sales, the target should drop. For a fully established product with strong organic ranking, advertising can shift toward defending positions at a low ACoS rather than driving all discovery at a higher one. Industry data suggests average ACoS across Amazon Sponsored Products sits between 20% and 35%. These averages are not targets: they reflect the full mix of seller strategies, product stages and category competitiveness. Your target should be built from your own margin, not from an industry average. One of the most direct ways to improve ACoS is to advertise on keywords that convert. A high-search-volume keyword that attracts clicks but no purchases drives ACoS up without delivering sales. A lower-volume but highly specific keyword that converts at a high rate can deliver a low ACoS even with competitive bids. Keyword research tools that show real Amazon search volume data help you identify which keywords have the right combination of relevance and commercial intent before you bid on them. Running ads on poorly matched keywords wastes budget and inflates ACoS. Running ads on terms that precisely match what your product delivers produces efficient spend and a lower ACoS over time.

A good ACoS on Amazon depends on your margin, product stage and goals. Learn what ACoS means, how to calculate it and what targets to aim for.