ACoSAdvertising Cost of Sales

Q: How is ACoS calculated?

ACoS is calculated as: ACoS = (Ad Spend / Attributed Sales) × 100. An Amazon Sponsored Products campaign spent $500 and generated $2,000 in attributed sales. ACoS = ($500 / $2,000) × 100 = 25%.

ACoS is Amazon's primary PPC metric: ad spend divided by sales attributed to that spend, expressed as a percentage. Lower is better.

Formula

ACoS = (Ad Spend / Attributed Sales) × 100

What does ACoS actually mean?

Advertising Cost of Sales (ACoS) is the dominant Amazon PPC metric. It measures ad spend as a percentage of attributed Amazon sales. ACoS is the inverse of ROAS: a 25% ACoS equals a 4× ROAS.

Amazon sellers target ACoS based on product margin. A product with 40% gross margin can profitably run a 35% ACoS (still 5% net contribution after ad spend). A 15%-margin commodity needs ACoS below 10% to break even on Amazon-attributed revenue alone.

The trap with ACoS is that it only counts Amazon-attributed sales. Most external Meta or TikTok traffic that drives Amazon purchases isn't credited to ACoS. This is why TACoS (Total ACoS), total ad spend divided by total Amazon sales, is the more honest profitability metric for brands running both internal and external traffic.

Example

An Amazon Sponsored Products campaign spent $500 and generated $2,000 in attributed sales. ACoS = ($500 / $2,000) × 100 = 25%.

When it matters

ACoS is the universal Amazon PPC metric. Every Amazon ad report leads with it. Pair with TACoS for a fuller profitability picture.

Related terms

TACoS

Total Advertising Cost of Sales

TACoS is total Amazon ad spend divided by total Amazon sales (organic + paid). It measures ad efficiency across all sales, organic included.

A+ Content

A+ Content is Amazon's enhanced product description module, with multimedia layouts with images, comparison charts and brand storytelling on listing pages.

ROAS

Return on Ad Spend

ROAS measures revenue generated for every dollar of ad spend. A 4× ROAS means $4 in revenue for each $1 spent.

MER

Marketing Efficiency Ratio

MER is total revenue divided by total ad spend. It's a blended, top-down profitability metric that's harder to game than platform ROAS.

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