Profit Per Unit

ACoS calculator for Amazon sellers

Put in your ad spend and ad sales to get ACoS and ROAS. Add your price and costs to get your break-even ACoS: the number your ACoS has to stay under for the ads to make money.

Your ads
Your product (for break-even ACoS)

Results

ACoS-
ROAS-
TACoS-
Sales not from ads-
Break-even ACoS-
Break-even ROAS-
Target ACoS-
Most you can pay per click-
Profit from ad sales after ad cost-

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How ACoS is calculated

ACoS (advertising cost of sales) is what you spent on ads divided by the sales those ads brought in, as a percent. This is Amazon Ads' own definition:

ACoS = ad spend ÷ ad sales × 100

Amazon's example: you spend $50 on a campaign and it brings in $100 of sales, so your ACoS is 50%. Half of every ad dollar of sales went back into the ads.

Lower is cheaper. A 20% ACoS means each $1 of ad sales cost you 20 cents in ads.

ACoS to ROAS

ROAS (return on ad spend) is the same number turned upside down:

ROAS = ad sales ÷ ad spend = 100 ÷ ACoS

In Amazon's example, $100 of sales from $50 of spend is a ROAS of 2. Amazon Ads reports both, so use whichever your tools show.

ACoSROAS
10%10
15%6.67
20%5
25%4
30%3.33
40%2.5
50%2
75%1.33
100%1

What is a good ACoS?

There is no single good number. Amazon says so too. A 35% ACoS loses money on a product with a 25% margin and makes money on one with a 50% margin.

The number that matters is your break-even ACoS, which is your profit margin before ads:

Break-even ACoS = (price − costs per unit before ads) ÷ price × 100

Example: you sell at $25. The product costs $6.80, shipping it to Amazon costs $0.75, the referral fee is $3.75 and the FBA fee is $6.20. That's $17.50 a unit, so you keep $7.50, or 30% of the price. Your break-even ACoS is 30%.

To keep a profit after ads, pick the margin you want and subtract it. Want 10% left after ads? Your target ACoS is 30% − 10% = 20%.

Running above break-even on purpose can still make sense for a short time, for example to get a new product its first sales and reviews. Amazon notes that new campaigns tend to have a high ACoS just because they're new. Set an end date for it, and watch TACoS while you do.

TACoS: ad spend against all your sales

ACoS only counts sales Amazon credits to your ads. TACoS (total advertising cost of sales) divides the same ad spend by all your sales, organic included:

TACoS = ad spend ÷ total sales × 100

Amazon Ads doesn't report TACoS. You work it out from the ad spend in campaign manager and the "Ordered product sales" in Business Reports for the same dates.

What it tells you: if your ACoS stays flat while TACoS falls, your organic sales are growing faster than your ad spend. If TACoS climbs, more of your business depends on ads.

The most you can pay per click

If you know your conversion rate (orders per 100 clicks), you can turn break-even ACoS into a bid ceiling:

Break-even cost per click = price × conversion rate × break-even ACoS

Example: a $30 product, 10 orders per 100 clicks and a 30% break-even ACoS. 100 clicks bring 10 orders, $300 of sales, and $90 of profit before ads. So paying more than $0.90 a click loses money. Bid under that to leave room for profit.

Sources

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