What Is a Good ACOS?
ACOS shows the relationship between advertising costs and ad sales, helping you measure how efficient your ads are.
Answer
There is no universally valid "good" ACOS. What matters is the specific goals of your advertising and the profit margin of your product. You should always base your assessment on your own target ACOS. Ask yourself: Do you want to maximize profit, increase reach, or just break even? In practice, always compare your current ACOS to your self-defined target ACOS. For a more complete evaluation, you might also look at "Total ACOS," which takes into account all your sales (both ad-driven and organic). Campaign performance should always be assessed with your personal goals and strategy in mind.
As a general rule, we recommend running campaigns at your Break-Even ACOS. This helps you maximize sales while ensuring that your ads pay for themselves.
How Do You Calculate Break-Even ACOS?
Subtract all your product costs as a percentage of the sale price. This includes taxes, Amazon fees, and shipping costs.
The percentage that remains is your break-even ACOS and also represents your profit margin. Each product has a different margin, so each break-even ACOS is unique.
For example, if your break-even ACOS is 21%, any ACOS under 21% means you're making a profit from advertising. Over 21% means your ads are causing you to lose money.
To calculate the actual ACOS of an ad campaign, divide your ad spend by the sales generated from ads:
ACOS = Advertising Cost / Advertising Sales