What is ACoS?
ACoS stands for Advertising Cost of Sales. It measures how much you spend on Amazon ads relative to the revenue those ads generate, expressed as a percentage. If you spent £20 in ads and those ads produced £100 in sales, your ACoS is 20%. ACoS (Advertising Cost of Sales) is the metric Amazon uses to show how efficiently your ad spend converts into revenue. It is calculated by dividing your total ad spend by the revenue those ads generated, then multiplying by 100 to express it as a percentage. For example: if your Sponsored Products campaign spent £178 and generated £892 in sales, your ACoS is 178 ÷ 892 × 100 = 20%. That means for every pound of ad-attributed revenue, you spent 20 pence on advertising. The formula is straightforward: ACoS (%) = (Ad Spend ÷ Ad Revenue) × 100. Both figures come from your Amazon Advertising console. Ad spend is the total amount charged for clicks during a given period. Ad revenue is the sales Amazon attributes to those clicks, typically within a 7-day or 14-day attribution window depending on the ad type. It is important to understand that ACoS only reflects revenue Amazon attributes to your ads. Organic sales, sales from other channels and sales outside the attribution window are excluded from the calculation. This means your overall business performance can be stronger than ACoS alone suggests. Amazon calculates ACoS at the campaign, ad group and keyword level, allowing you to identify which parts of your advertising are working most efficiently and which are consuming budget without returning proportionate revenue. There is no single correct ACoS because the right target depends on your product's profit margin. Your break-even ACoS is equal to your profit margin percentage. If your margin is 30%, an ACoS below 30% means the campaign is contributing profit. An ACoS above 30% means advertising costs are eroding more than your margin can support. Most established sellers aim for an ACoS meaningfully below their break-even point, leaving room for profit after all costs. A target ACoS of around 15% to 25% is common for mature listings with healthy margins, but this varies widely by category and competition level. New product launches are a deliberate exception. Many sellers tolerate a high ACoS, sometimes above break-even, during the launch phase because the goal is building sales velocity and organic ranking history rather than immediate profit. Once organic ranking improves, reliance on paid traffic decreases and ACoS naturally falls. ACoS and ROAS (Return on Ad Spend) measure the same relationship between ad spend and ad revenue but express it differently. ACoS is a percentage showing what fraction of revenue was spent on ads. ROAS is a multiplier showing how many pounds of revenue each pound of ad spend returned. The two are mathematical inverses: ROAS = 100 ÷ ACoS, and ACoS = 100 ÷ ROAS. A 20% ACoS equals a ROAS of 5 (£5 revenue per £1 spent). A 25% ACoS equals a ROAS of 4. Amazon's advertising console displays ACoS natively; some third-party tools prefer ROAS. Improving ACoS means either reducing spend without losing sales, or increasing the revenue your ads generate. The most reliable levers are keyword targeting, bid management and listing quality. Reviewing your search term report regularly reveals which terms are consuming budget without converting. Adding these as negative keywords prevents future spend on unproductive searches. Shifting budget toward exact-match keywords with proven conversion history improves spend efficiency. Reducing bids on high-ACoS keywords and increasing bids on low-ACoS keywords gradually shifts the campaign's overall efficiency. Improving your listing, with stronger images, clearer bullets and more competitive pricing, raises your conversion rate and lowers ACoS without touching bids at all.
Learn what ACoS means in Amazon PPC, how to calculate Advertising Cost of Sales and what a good ACoS target looks like for your campaigns.