Glossary
ACoS (Advertising Cost of Sales)
ACoS (Advertising Cost of Sales) is the ratio of advertising spend to advertising-attributed revenue on Amazon. If you spend $100 on ads and generate $400 in ad-attributed sales, your ACoS is 25 percent. It is the most widely used efficiency metric for Amazon PPC but only measures performance within ad-driven sales, not overall business health.
Why it matters for Amazon sellers
ACoS is useful for campaign-level and keyword-level decisions because it shows how efficiently specific ad dollars convert. A campaign with a 15 percent ACoS is typically healthier than one at 60 percent. But ACoS becomes misleading when used as a business KPI. A 20 percent ACoS looks great until you realize your total ad spend is 40 percent of total revenue, which is TACoS — a different and more complete picture. The trap most sellers fall into is optimizing for the lowest possible ACoS, which often means cutting profitable campaigns that happen to show a high ratio. A high-ACoS branded defense campaign may look expensive on paper but be essential for preventing competitor conquest. A launch-phase product campaign will always have high ACoS because organic conversion has not caught up yet. Judging these campaigns by ACoS alone kills growth without the seller realizing it. Modern AI bid systems should optimize for contribution margin, not arbitrary ACoS targets.
How Profasee handles this
Marko tracks ACoS at the campaign and keyword level but optimizes for contribution margin — the actual dollars your business keeps after COGS, fees, and ad cost. This prevents the common mistake of cutting profitable campaigns because their ACoS looks high in isolation, while still giving you the ACoS visibility you need to evaluate performance.
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Frequently asked questions
What is a good ACoS on Amazon?
It depends on your margins and goals. A 15 percent ACoS might be great for a high-margin product but unsustainable for a low-margin one. The real question is whether your ad spend generates profitable sales after accounting for all costs — not whether ACoS hits an arbitrary target.
What is the difference between ACoS and TACoS?
ACoS measures ad spend divided by ad revenue (only sales directly attributed to ads). TACoS measures ad spend divided by total revenue (including organic sales). TACoS gives a more accurate picture of how advertising affects your whole business.
Should I use ACoS or ROAS for Amazon PPC?
They are the same metric expressed differently — ROAS is the inverse of ACoS (25% ACoS = 4x ROAS). Amazon advertisers typically speak in ACoS; Google and Meta advertisers use ROAS. Both are lead indicators. Contribution margin is the lag indicator that matters most.
Related terms
TACoS (Total Advertising Cost of Sales)
TACoS (Total Advertising Cost of Sales) is the ratio of total ad spend to total revenue on Amazon — ...
Read the TACoS (Total Advertising Cost of Sales)definition →
Contribution Margin
Contribution margin is revenue minus all variable costs — cost of goods sold, Amazon referral fees, ...
Read the Contribution Margindefinition →
AI Agent
An AI agent is a software system that perceives its environment, reasons over multiple inputs, and t...
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