Running ads on Amazon can get expensive fast. In fact, according to Jungle Scout’s 2024 Amazon Advertising Report, over 52% of sellers say rising ad costs are their biggest challenge to staying profitable. If your sales are going up but your profits aren’t, your ACoS could be the reason why.
In this blog, you’ll learn what ACoS (Advertising Cost of Sales) really means, how to calculate it, and how to bring it down without hurting your sales. These are proven tips real sellers use to make the most of every advertising dollar.
If you’ve looked at your ad spend and thought, “I’m paying more, but earning the same,” this guide will help you fix that.
ACoS stands for Advertising Cost of Sales. It’s one of the most important numbers to track in your Amazon ad campaigns because it shows how much you're spending on ads to make a sale. You calculate it by dividing your total ad spend by the total sales that came from those ads.
For example, if you spend $100 on ads and make $200 in sales, your ACoS is 50%. That means you’re spending 50 cents on ads for every dollar you earn.
n general, a lower ACoS is better. It means you’re spending less to bring in each sale. But what counts as a “good” ACoS depends on your product costs, goals, and how aggressive you want to be with your advertising.
Several things can affect your ACoS, including:
You can improve your ACoS by making your listings clearer, using more targeted keywords, and adjusting your bids to stay competitive without overspending.
A tool like Keyword Scout can help you find high-traffic keywords that match your products and improve your ad performance.
Tracking ACoS gives you insight into whether your ad budget is being spent wisely. Once you understand it, you can spot where you're losing money and take real steps to improve your results.
ACoS, or Advertising Cost of Sales, is calculated with a simple formula:
ACoS = (Ad Spend ÷ Ad Sales) × 100
For example, if you spend $50 on Amazon ads and those ads generate $100 in sales, your ACoS would be:
(50 ÷ 100) × 100 = 50%
This tells you that you’re spending 50 cents on ads for every dollar earned through advertising.
To track your ACoS and other key metrics, tools like Jungle Scout’s Advertising Analytics can be helpful. It not only shows your ACoS but also tracks TACoS, your Total Advertising Cost of Sales.
While ACoS only includes the sales that come directly from ads, TACoS takes into account both ad-driven and organic sales. That makes TACoS a broader measure of how your advertising affects your total business performance.
Since ACoS only looks at ad-attributed sales, it will almost always be higher than TACoS. Understanding the difference helps you see whether your ads are boosting your full sales funnel, not just the clicks you pay for.
In simple terms, the lower your ACoS, the better; it means you’re spending less on ads to make each sale. But what counts as a “good” ACoS depends on your product’s profit margins and your business goals.
A low ACoS means your ads are working efficiently. You’re targeting the right keywords, and your product listings are converting well. A high ACoS, on the other hand, usually points to weak targeting, low conversion rates, or a campaign that needs fine-tuning.
Here are some general benchmarks for ACoS:
Your ads are highly efficient. You’re getting strong conversions at a low cost. This could be a signal to increase your bids and drive even more traffic.
Your performance is steady, but there may be room to optimize either your targeting or listing.
You’re likely spending too much for too little return. This often happens when you're bidding on keywords that bring clicks but not conversions. It's a sign to revisit your targeting strategy.
Knowing both ACoS and TACoS helps you balance short-term ad costs with long-It’s also important to look beyond ACoS alone. A high ACoS doesn’t always mean you’re losing money, especially if your ads are helping boost organic sales.
That’s where TACoS (Total Advertising Cost of Sales) gives you a clearer view of overall performance.
A lot of sellers say the same thing: “I want more sales and a lower ACoS and I want it to happen fast.”
But the fact is that getting more orders and lowering your ad costs don’t always happen at the same time. Sometimes, if you focus on growing fast, your ACoS goes up. And if you try to cut costs too much, you might slow down your sales.
So first, ask yourself: What matters more right now, getting more sales or spending less to make each sale?
If you’re launching a new product, it’s normal to have a high ACoS at first. You’re trying to get attention and build up momentum. Profit comes later.
But if you’re trying to make the most of a limited budget, your goal should be to keep ACoS as low as possible. That means being careful with how and where you spend.
Lower your keyword bids so you’re not paying too much per click.
Target better keywords that match what your customers are really searching for.
Remove keywords that don’t work, and block them so your ads don’t show there again.
Make your product page better with clearer images and better descriptions to increase sales from the clicks you’re already getting.
One of the smartest things you can do as a seller is treat ACoS not just as a cost metric, but as a signal. High ACoS doesn’t always mean failure; it often points to where your customer journey is breaking down.
Maybe shoppers are clicking but not buying. Maybe your product stands out, but your pricing doesn’t.
Instead of reacting to the number, use it to ask better questions. Where are clicks coming from? What’s happening after they land? Is your product positioned clearly enough to win the sale?
If you’re not sure where to start, Brandefyn can help you figure it out and build ad campaigns that actually work.