- ACoS compares ad spend with ad-attributed sales.
- TACoS compares ad spend with total sales.
- A lower percentage is not automatically better if it suppresses profitable growth.
- Break-even ACoS depends on the contribution margin available before advertising.
ACoS: advertising cost of sales
ACoS is commonly calculated as ad spend divided by ad-attributed sales, multiplied by 100. It helps evaluate the efficiency of advertising-generated sales, but it does not by itself show whether the overall business is profitable.
TACoS: ad spend relative to total sales
TACoS is commonly calculated as ad spend divided by total sales, multiplied by 100. It can help show how advertising intensity relates to the whole account or product, including organic sales.
Why margin comes first
A 20% ACoS may be profitable for one product and unprofitable for another. The relevant threshold depends on the margin available after Amazon fees and product-level costs. Sellers should define a break-even level and a target level rather than using a generic percentage copied from another account.
Look at trends, not one day
Advertising data can be noisy over short periods. Analyse enough data to account for conversion lag, seasonality, stock status and campaign changes. Use search-term and targeting data to understand where spend is actually going.