Know instantly whether your Amazon ads are profitable, at break-even, or losing money. Calculate your Target ACoS to maximise profit at any margin.
ACoS (Advertising Cost of Sale) = Ad Spend ÷ Ad Revenue × 100. Example: you spend ₹2,000 on ads and generate ₹10,000 in ad-attributed sales → ACoS = 20%. A lower ACoS means your ads are more efficient, but too low can mean you're under-investing and losing sales to competitors.
Break-even ACoS = your gross profit margin % (before advertising costs). Example: if your selling price is ₹999, COGS is ₹300, and Amazon fees are ₹180 → Gross Margin = (999−300−180)/999 = 51.9%. So any ACoS below 51.9% means you're at least covering your costs. Any ACoS above break-even = you're losing money on every ad-driven sale.
Target ACoS is the ACoS you need to achieve your desired profit margin. Formula: Target ACoS = Break-even ACoS − Desired Profit %. Example: Break-even is 50%, you want 20% net profit → Target ACoS = 30%. Use this as your benchmark when setting bids in Sponsored Products campaigns.
TaCoS (Total ACoS) = Ad Spend ÷ Total Revenue (organic + paid). ACoS only counts paid sales. TaCoS measures the true advertising burden on your whole business. If your TaCoS is falling while ACoS stays the same, it means organic sales are growing — your PPC is boosting ranking without proportionally increasing ad costs. Target TaCoS under 10–15% for a healthy brand.
It depends on your category and margins. A general guide: Below 15% — excellent efficiency. 15–25% — good, standard for most categories. 25–40% — acceptable for launches or brand building. Above your break-even — losing money on ads, needs immediate restructuring.