There is no single correct answer to "what should my ACoS be" — and figures like "15% is ideal" that circulate online are misleading. The right ACoS is a number derived from your product’s profit margin.
What is ACoS?
ACoS (Advertising Cost of Sale) is ad spend divided by the sales that advertising produced:
ACoS = (Ad spend ÷ Ad-attributed sales) × 100
Spend 100 and generate 500 in sales and your ACoS is 20%. Low ACoS is not automatically good: a very low ACoS usually means bids are too conservative and you are leaving volume on the table.
Break-even ACoS: the number that matters
Break-even ACoS equals your profit margin. At that point advertising neither makes nor loses money.
Break-even ACoS = profit margin (%)
Worked example
Take a product selling at 400:
| Item | Amount |
|---|---|
| Selling price | 400 |
| Cost of goods | 180 |
| Marketplace commission | 60 |
| Shipping and packaging | 40 |
| Remaining (gross profit) | 120 |
| Profit margin | 30% |
| Break-even ACoS | 30% |
On this product 25% ACoS is profitable, 30% breaks even and 35% loses money. That same 30% is comfortably profitable on a product with a 45% margin. A "good ACoS" varies by product, not by sector.
TACoS: the overlooked metric
TACoS (Total ACoS) is ad spend as a share of total sales, including organic.
TACoS = (Ad spend ÷ Total sales) × 100
If ACoS holds steady while TACoS falls, advertising is feeding your organic rank — a good sign. If TACoS is rising, you are buying an ever larger share of your sales.
When can the target sit above margin?
- During a product launch, to buy ranking with a deliberate short-term loss
- On products with high customer lifetime value and repeat purchase rates
- When clearing stock or running end-of-season liquidation
All of these are temporary and deliberate. Running indefinitely above margin is a loss, not a strategy.
What to do in practice
- Calculate margin per product — a category average is not enough
- Find break-even ACoS and set the target below it
- Read the search term report weekly and negate terms that do not convert
- Track TACoS alongside ACoS