How can I evaluate the current performance of campaigns. What is a good target ACoS for me?
It is not possible to say in general terms what a good ACoS is, since this always depends on the strategy and cost structure of the products. We recommend running campaigns with a Break-Even ACoS, as this maximizes revenues and makes the advertising self-sustaining.
How to calculate a Break-Even ACoS?
Deduct a percentage of all the cost of your product from its selling price. This includes also taxes, Amazon fees and shipping costs.
The percentage that remains is your Break-Even ACoS and your profit margin. Since each product has a different margin, each Break-Even ACoS is different.
With a break-even ACoS of 21% - as in our example shown - you would make a profit on advertising if the ACoS was below 21%. Values above 21% mean losses from your advertising.
To calculate the actual ACoS of an advertising campaign, you have to divide your advertising costs by the revenues you generated with advertising:
Read our blog article to learn more about the importance of the advertising cost of sale for your PPC ads.
Tip: If you have connected the Selling Partner API, you can enter the production costs in Product Management and we will automatically calculate the profit (click on the profit amount for a detailed view of the calculation). Afterwards, you can also select one of the three dynamic ACoS strategies that adapt to changing prices:
- Break-Even: Profit in %
- Profitable: 0.75 times the profit in %
- Promote: 2 times the profit in %
For example, if the break-even ACoS is 30%, we use 22.5% as target ACoS if Profitable is selected and 60% as target ACoS if Promote is selected.