Amazon glossary
What is ACoS?
ACoS stands for Advertising Cost of Sales.
By AIAdKing Editorial Team · Reviewed
- ACoS — Advertising Cost of Sales
- ACoS (Advertising Cost of Sales) = ad spend ÷ ad revenue × 100. It measures how much you spend on Amazon ads to make one rupee (or dollar) of ad-attributed sales. Lower is more efficient; your break-even ACoS equals your profit margin.
In depth
ACoS is the headline efficiency metric for Amazon Sponsored Products. An ACoS of 25% means you spent ₹25 in ads for every ₹100 of ad-attributed revenue. It only counts sales Amazon attributes to a click — not organic sales the ad helped drive (that is TACoS). Your break-even ACoS is your contribution margin: if you keep 30% after product cost and fees, an ACoS above 30% loses money on that ad sale, below 30% profits.
Formula
ACoS % = (Ad Spend ÷ Ad-Attributed Sales) × 100
Worked example
Say your Sponsored Products campaign for a ₹899 kitchen gadget spent ₹12,400 in ads last month and drove ₹41,300 of ad-attributed revenue. ACoS = 12,400 ÷ 41,300 × 100 = 30.02%. If your contribution margin after Amazon fees, FBA, and COGS is 34%, you kept 34% − 30.02% = 3.98% of that revenue as profit — thin, but positive. If the same campaign spent ₹18,000 for ₹41,300 revenue (ACoS 43.6%), you would lose 9.6% on every ad sale.
When to use it
Report ACoS at the campaign, ad group, and search-term level whenever you need to judge paid efficiency in isolation — e.g. weekly bid reviews, negative-keyword harvesting sessions, or when comparing two campaigns targeting the same product. It is the right lens for tactical PPC decisions.
Common mistakes
- Chasing an industry-average "good" ACoS (like 25%) instead of computing your own break-even ACoS from real margin — a 40% ACoS is fine for a 55%-margin product and a disaster for a 30%-margin one.
- Optimising to lowest ACoS instead of highest profit — squeezing ACoS from 28% to 18% by killing volume can shrink total profit even though the ratio looks prettier.
- Comparing this-week ACoS to last-week without correcting for the 48-hour Amazon attribution lag — recent spend is fully counted, but the sales it drove are still landing.
How AIAdKing handles ACoS
AIAdKing moves each bid toward your target ACoS every night — trimming bids on losing search terms, harvesting non-converting terms as negatives, and concentrating spend where it converts — so ACoS falls without you touching Seller Central by hand.
ACoS — quick answers
What is ACoS (Advertising Cost of Sales)?
How does AIAdKing handle ACoS?
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