ACOS (Advertising Cost of Sale) is the ratio of Amazon ad spend to the sales those ads produce. It is the inverse of ROAS: 4x ROAS = 25% ACOS. It is the core metric for Amazon sellers because it is what the Amazon dashboard shows by default.
ACOS counts only ad-attributed sales; it ignores the customer who sees the ad and then buys organically. So ACOS can look good while total profitability is poor, or the other way round. On new product launches sellers deliberately run high ACOS to win rank; on mature products the goal is to stay below break-even ACOS.
ACOS = Ad spend ÷ Ad-attributed sales × 100 · Break-even ACOS = Gross margin percentage
On a product with a 35% gross margin, break-even ACOS is 35%. 28% ACOS is profitable, 42% ACOS loses money.
ACOS counts only ad-attributed sales; it ignores the customer who sees the ad and then buys organically. So ACOS can look good while total profitability is poor, or the other way round. On new product launches sellers deliberately run high ACOS to win rank; on mature products the goal is to stay below break-even ACOS.
Knowing the term is not enough; you need to know which lever to pull. In a free 30-minute call we look at your store's actual numbers.
Get a free analysis