ACoS (Advertising Cost of Sale) is a key metric used to measure the profitability of Amazon Sponsored Ads campaigns. This comprehensive guide will explain what Amazon ACoS is, how to calculate it correctly, and strategies to help lower ACoS for improved PPC ROI.

What is Amazon ACoS?

ACoS stands for “Advertising Cost of Sale” and it is an essential metric for assessing the effectiveness of your Amazon PPC ads.

Specifically, Amazon ACoS tells you:

  • How much you are spending on advertising per each product sale generated
  • The profitability of your Sponsored Ads campaign

Amazon determines ACoS using this formula:

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Total Advertising Spend --------------------------------- x 100 = ACoS % Total Sales from Clicks

Lower ACoS percentages mean greater profitability from PPC spend. High ACoS campaigns may be unprofitable after product costs and fees.

Monitoring ACoS helps guide Amazon PPC bid and budget decisions to maximize ROI. It is a key performance indicator for advertisers on Amazon.

Why is Amazon ACoS Important?

Paying close attention to Amazon Advertising Cost of Sale is crucial for these reasons:

Measures Campaign Profitability

ACoS shows how much ads are costing you per sale. Allows assessing ROI.

Identifies Issues

High ACoS points to low conversion rates or unprofitable products needing optimization.

Guides Bidding Decisions

Knowing ACoS helps determine optimal bids to maintain profitability.

Benchmarks Performance

ACoS can be tracked over time to measure performance improvements.

Supports Budgeting

ACoS helps decide appropriate budgets for campaigns and ad groups.

Monitoring Amazon ACoS is essential for maximizing the results and profitability from advertising spend.

How to Calculate Amazon ACoS

Amazon provides the ACoS percentage in Sponsored Ads reporting. But it’s instructive to walk through the manual calculation:


  • You spent $100 on Amazon Sponsored Ads last month
  • You received 300 clicks from your ads to product listings
  • Those 300 clicks generated 10 sales

ACoS Calculation

Advertising Spend: $100 Sales from Clicks: 10

($100 Ad Spend / $10 Sales from Clicks) x 100 = 1000% ACoS

So an ACoS of 1000% indicates you spent $100 in ads to make $10 in sales. The goal is decreasing ACoS closer to break-even.

Tip – When calculating manually, use the total sales generated from clicks within the campaign date range, not all sales. Amazon calculates based on click sales.

What is a Good ACoS Percentage?

The optimal ACoS depends on your profit margin on the product:

High Margin Products

  • Products priced at 2X cost or higher
  • Goal ACoS below 30%

Low Margin Products

  • Priced closer to breakeven costs
  • ACoS goal below 100%

**Example: **

Product costs $10, sells for $25

30% max ACoS means spending up to $7.50 to make the $15 profit

As a rough guide:

  • ACoS below 20% is excellent
  • 20-30% is profitable for high margin products
  • 60-100% may be okay for lower cost commodities
  • 100%+ is too high, losing money

Aim to reduce ACoS as low as possible while maintaining sales volumes.

Why is My Amazon ACoS So High?

There are a few possible causes of high Amazon ACoS to investigate:

Low Conversion Rates

Too few clicks are converting to sales. Improve listing content, prime placement, pricing.

Insufficient Bid Optimization

Bidding too high on non-converting keywords. Adjust bids down or remove poor performers.

Unprofitable Products

Running ads for products with slim margins. Focus on higher profitability products.

High CPCs

Bidding up CPCs too high can inflate ACoS. Set ceilings on max CPC bids.

Increased Competition

More advertisers targeting your keywords push up costs per click and sale.

Carefully analyze high ACoS ad groups to identify the root cause and improve performance.

How to Lower Amazon ACoS

Here are proven strategies to help reduce Amazon Advertising Cost of Sale:

Increase Conversions

Make improvements to product listings and copy to increase sales from clicks. More unit sales spread fixed ad costs.

Remove Low performing Keywords

Cut unprofitable keywords that generate clicks but not conversions.

Lower Your CPC Bids

Bid just enough to maintain ad position. Overbidding drives up costs.

Cultivate Relevancy

Ensure keywords precisely match landing page products and target specific searcher intent.

Promote Top Selling / High Margin Products

Focus PPC on proven winners that convert efficiently.

Analyze Ranking Page Position

Benchmark click to sale conversion rates by ad placement on page.

Tighten Targeting

Use negative keywords, placement and demographic targeting to reduce irrelevant clicks.

Optimizing for relevancy and conversions yields more sales per click, thus lowering ACoS.

Using ACoS to Optimize Amazon PPC Campaigns

Analyzing ACoS by segment enables optimizing keyword bids, match types and budgets:

By Keyword

Assess keyword-level ACoS to identify winners vs. low performers. Tighten bids or pause poor keywords.

By Match Type

Review ACoS by broad, phrase and exact match keywords. Reduce broad match bids generating irrelevant clicks.


See which products convert efficiently from ads using ASIN-level ACoS. Double down on winners.

By Campaign

Compare ACoS across campaigns to shift budgets to most profitable setups.

By Time Period

Watch ACoS trends week over week and month over month as changes roll out.

Drill into ACoS segments to find optimization opportunities and continuously refine Amazon PPC.

Using ACoS to Compare Sponsored Products Campaigns

Because ACoS normalizes spend against sales, it allows fairly comparing PPC performance across campaigns with different budgets and products.

Assess New Campaign Potential

Test new products or brands with starter PPC campaigns. If ACoS is promising, expand budget.

Compare Automated vs Manual Targeting

See if self-managed keywords outperform automated PPC algorithm.

Evaluate Brand Campaigns

Review brand campaign ACoS vs generic terms. Adjust brand bidding if conversions lag.

Audit Low Traffic ASINs

Run test PPC to poorly performing ASINs. Cut if ACoS is untenable.

Judge New Selections

Before large inventory buys, test demand with PPC. Project profitability using ACoS.

Leaning on ACoS helps efficiently evaluate new PPC initiatives and expand those showing positive ROI.

Using ACoS for Amazon PPC Bid Optimization

ACoS also guides ongoing bid management:

Automated Bidding AI

Start with Amazon’s automated bids, then refine manually while considering ACoS impact.

Maintain Minimum ACoS Thresholds

Set floor ACoS for keyword bids. Pause phrases exceeding targets.

Balance Position and ACoS

Monitor ACoS by ad position – only bid up to sustain profitable placement.

Reduce High ACoS Keywords

Lower bids for terms with high ACoS until profitable or pause.

Increase Low ACoS Bids

Bump up bids for keywords with low ACoS to capture more impressions.

Routinely adjusting bids based on corresponding ACoS keeps campaigns profitable.

ACoS Tips and Best Practices

Keep these additional tips in mind when working with Amazon ACoS:

  • Filter out junk ACoS data by excluding test spends and giveaways from calculation
  • Use date range filters – don’t assess campaigns based on all-time ACoS
  • Ignore ACoS for new campaigns – wait for statistically significant data
  • Expect ACoS variation by product, seasonality, demand shifts
  • Don’t obsess over daily fluctuations – watch weekly and monthly trends
  • If ACoS too low, ensure proper tracking in place – don’t want underreported sales
  • For “Sales and Traffic” campaigns, measure ACoS by sales not clicks

Stay focused on current, segmented timeframes when evaluating ACoS to make informed decisions.

Pros and Cons of Amazon ACoS

Overall, ACoS is a valuable metric – but it isn’t perfect. Tradeoffs include:


  • Normalizes performance across keywords and campaigns
  • Identifies high and low performers
  • Quantifies profitability from advertising spend
  • Guides bid and budget decisions
  • Easy to track over time


  • Only indicates advertisement efficiency
  • Many factors can influence ACoS
  • Difficult to compare across account structures
  • Data accuracy depends on tracking setup
  • Changes slowly due to averaging effect

Understanding context is vital when analyzing ACoS trends. Use ACoS in combination with other data points to make optimized choices.

Advertising Cost of Sale vs Return on Ad Spend (RoAS)

ACoS measures the advertising cost per sale generated. Return on Ad Spend or RoAS flips the formula to instead calculate the sales generated per advertising dollar:

Return on Ad Spend (RoAS)

Total Sales from Clicks ------------------------------ x 100 = RoAS % Total Advertising Spend

Higher RoAS percentages indicate greater efficiency – more sales produced per dollar of ads.

Convert between the two metrics using this equation:

ACoS% x RoAS% = 100


If ACoS is 25%, then RoAS would be 400% (25% x 400% = 100)

Optimizing for lower ACoS and higher RoAS both achieve the same end goal – maximizing sales from advertising dollars. Use whichever metric provides more insight.

Amazon ACoS FAQs

Here are answers to some frequently asked questions about Amazon’s Advertising Cost of Sale metric:

How often does Amazon update ACoS numbers?

ACoS is calculated daily based on the latest advertising cost and sales accrued each day. There is some latency so current ACoS may reflect data from 2-3 days prior.

Where can I find ACoS in Seller Central?

Navigate to the “Advertising” section then click “Campaigns”. Use filters to choose the date range, then columns can be added to show ACoS.

Should I use ACoS for budget allocation across campaigns?

Yes, ACoS is helpful for deciding budget distribution. Routinely shift budgets towards campaigns, ad groups and keywords demonstrating lower ACoS.

How do promotional ads impact my ACoS?

Discounted or free product promotions will artificially lower ACoS since they boost sales in the calculation. Exclude promotional time periods when analyzing typical ACoS.

Can ACoS help me calculate my profit margins?

Yes. ACoS multiplied by your net profit per sale indicates how much earnings to allocate towards advertising costs. This guides budgeting to maintain profit goals.


The key takeaways around Amazon ACoS:

  • Vital for assessing ad profitability and guiding optimizations
  • Calculate manually or use Sponsored Ads reporting
  • Goal is reducing ACoS as low as possible while sustaining sales
  • Diagnose high ACoS issues impacting ROI
  • Use segmented ACoS to optimize keywords, match types and product targeting
  • Refine bids and budgets regularly based on latest ACoS data

Closely monitoring and optimizing your Amazon ACoS will maximize the results and profitability achieved from Sponsored Ads spend.


  • Gio Watts

    Gio Watts brings over 10 years of digital marketing experience to his role as marketing manager at Walletminded. In his current position, Gio oversees brand marketing, campaign management, and audience growth initiatives. Prior to joining Walletminded, Gio held marketing roles at several ecommerce and SaaS startups, most recently serving as senior marketing manager at CloudTable Inc. There, he specialized in paid social advertising and content marketing. Gio holds a bachelor’s degree in business marketing from the University of Oregon. He is a certified content marketing specialist and frequently guest lectures at his alma mater. When he's not devising omni-channel marketing campaigns, you can find Gio coaching youth basketball and indulging his passion for live music.

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