Core formulas
The formulas to keep straight
ACOS = ad spend / ad revenue x 100ROAS = ad revenue / ad spendBreak-even ACOS = contribution margin before ads / ad revenue x 100Target ACOS = (contribution before ads - target profit) / ad revenue x 100Profit after ads = contribution before ads - ad spendROAS = 1 / ACOS as a decimalWhat ACOS is good for Amazon sellers?
A good ACOS is below the ACOS your product can afford. Start with contribution margin before ads. If a product keeps 35% of ad revenue after product cost, Amazon fees, shipping, and prep, then 35% ACOS is break-even. A profit campaign should target less than that.
A 25% ACOS is not automatically good. It is good for a product with 40% contribution margin because it leaves 15% profit before overhead. It is bad for a product with 20% contribution margin because it loses 5% before overhead.
A 25% ACOS equals 4.00x ROAS.
Good ACOS by contribution margin, checked July 4, 2026
All rows use ad-attributed sales as the denominator.
| Contribution margin before ads | Break-even ACOS | Target ACOS with 10% profit | ROAS equivalent of target |
|---|---|---|---|
| 20% | 20% | 10% | 10.00x |
| 30% | 30% | 20% | 5.00x |
| 40% | 40% | 30% | 3.33x |
| 50% | 50% | 40% | 2.50x |
| 60% | 60% | 50% | 2.00x |
How do you calculate ACOS?
Calculate ACOS by dividing ad spend by ad-attributed revenue and multiplying by 100. If a campaign spends $300 and reports $1,200 in ad-attributed sales, ACOS is 25%. The ROAS version of the same campaign is 4.00x.
Verified July 4, 2026, Amazon Ads states that ACOS is calculated as ad spend divided by ad revenue, converted to a percentage. Amazon also describes ROAS as the inverse, ad revenue divided by ad spend.
A campaign with $300 ad spend and $1,200 ad sales has 25% ACOS.
ACOS and ROAS conversion examples
| Ad spend | Ad sales | ACOS | ROAS |
|---|---|---|---|
| $100 | $1,000 | 10% | 10.00x |
| $200 | $1,000 | 20% | 5.00x |
| $250 | $1,000 | 25% | 4.00x |
| $333 | $1,000 | 33.3% | 3.00x |
| $500 | $1,000 | 50% | 2.00x |
How do you set target ACOS?
Set target ACOS by subtracting the profit you want to keep from contribution before ads, then dividing the remaining ad budget by ad-attributed sales. If a $60 sale has $24 contribution before ads and you want $6 profit left, target ACOS is 30%.
This gives you a target you can actually defend. It is stricter than break-even ACOS because it protects profit. A launch campaign can choose to spend above target, but it should not pretend to be profitable.
A $60 product with $24 contribution before ads and a $6 profit target has 30% target ACOS.
Target ACOS example
| Line item | Amount | Formula role |
|---|---|---|
| Ad-attributed sale | $60.00 | Revenue |
| Product cost | $18.00 | Subtract before ads |
| Amazon fees | $9.00 | Subtract before ads |
| Shipping and prep | $9.00 | Subtract before ads |
| Contribution before ads | $24.00 | $60 - $18 - $9 - $9 |
| Break-even ACOS | 40% | $24 / $60 |
| Profit target | $6.00 | 10% of revenue |
| Target ACOS | 30% | ($24 - $6) / $60 |
Can a high ACOS be acceptable?
A high ACOS can be acceptable for a launch, ranking test, keyword discovery, or inventory move, but only with a fixed budget and a clear reason. It is not acceptable when a mature profit campaign keeps missing target ACOS.
Separate launch ACOS from profit ACOS. If they sit in the same report, the average can hide the fact that one campaign is funding another. That makes decisions cloudy.
A campaign can be above target ACOS and still be useful, but it is not a profit campaign.
ACOS decision by campaign job
| Campaign job | ACOS rule | Best action |
|---|---|---|
| Profit campaign | Actual ACOS below target ACOS | Scale carefully |
| Launch campaign | Can exceed target ACOS with a cap | Budget as launch spend |
| Keyword test | Can be messy early | Judge search term learning |
| Branded defense | Usually should be low | Watch incrementality |
| Clearance | Can be higher than target | Protect cash recovery |
Decision table
ACOS decision rules
| Signal | Meaning | Action |
|---|---|---|
| ACOS above break-even | Campaign loses money after ads | Pause or fix economics |
| ACOS below break-even but above target | Some profit remains, but not enough | Test with a cap |
| ACOS below target | Campaign keeps planned profit | Scale carefully |
| Low ACOS with low sales | Efficient but small | Expand search terms slowly |
| High TACOS with low ACOS | Ads may be too large relative to total sales | Check total account pressure |
Worked examples
Examples you can compare against your own numbers
Example 1: profitable 20% ACOS
An Amazon campaign spends $480 on $2,400 in ad-attributed sales.
| Ad sales | $2,400 | Attributed revenue |
|---|---|---|
| Ad spend | $480 | Campaign cost |
| ACOS | 20% | $480 / $2,400 |
| Contribution before ads | $1,200 | After product cost, Amazon fees, and shipping |
| Profit after ads | $720 | $1,200 - $480 |
Takeaway: This is a strong campaign because actual ACOS is below both break-even and target ACOS.
Open the profitable ACOS exampleExample 2: 25% ACOS that loses money
A campaign spends $300 on $1,200 sales, but the product is thin.
| Ad sales | $1,200 | Attributed revenue |
|---|---|---|
| Ad spend | $300 | 25% ACOS |
| Contribution before ads | $240 | 20% margin before ads |
| Break-even ACOS | 20% | $240 / $1,200 |
| Profit after ads | -$60 | $240 - $300 |
Takeaway: The ACOS looks reasonable until product margin is counted.
Open the losing ACOS exampleAction checklist
Before you use this number in the real business
- 1Calculate product contribution before ads.
- 2Set break-even ACOS from contribution margin.
- 3Subtract target profit to set target ACOS.
- 4Compare campaign ACOS with both thresholds.
- 5Separate launch campaigns from profit campaigns.
- 6Track TACOS beside ACOS for account-wide pressure.
Common mistakes
Mistakes that make the answer look better than reality
FAQs
Questions people ask before making the decision
What is a good ACOS on Amazon?
A good ACOS is below your target ACOS. If a product has 40% contribution margin and you want 10% profit left, target ACOS is 30%.
Is 25% ACOS good?
It is good when contribution margin before ads is above 25%. It is not good when the product only keeps 20% before ads, because the campaign loses money.
What is break-even ACOS?
Break-even ACOS is contribution margin before ads divided by ad-attributed revenue. If a product keeps 35% before ads, break-even ACOS is 35%.
How do I convert ACOS to ROAS?
Divide 1 by ACOS as a decimal. A 25% ACOS equals 1 / 0.25, or 4.00x ROAS.
Should ACOS always be as low as possible?
No. Very low ACOS can mean the campaign is too narrow. The better target is profitable scale, not the lowest possible ACOS.
What is TACOS?
TACOS is total ad spend divided by total sales. It shows how much the whole Amazon account depends on ads, while ACOS focuses on ad-attributed sales.
Sources and notes
Where the assumptions come from
Official Amazon Ads guide defining ACOS, ROAS, break-even ACOS, and target ACOS concepts.
FeeProofed conversion table and profit rules for ACOS and ROAS.
FeeProofed guide for margin-based break-even ad thresholds.