ACOS (Advertising Cost of Sale)

Why it matters

ACOS answers one question: for every dollar of sales your ads produced, how much did you pay Amazon to produce it? A 25% ACOS means you spent $25 in ads to generate $100 in ad-attributed sales. It is the number most sellers watch daily, and the number most often misread, because ACOS only counts sales Amazon attributes to a click. It says nothing about the organic sales those ads helped rank.

In practice

The mistake we see most often is treating a low ACOS as automatically good. An ACOS of 8% usually means a campaign is under-bid and starving, you are winning only the cheapest, most obvious searches and leaving the volume on the table. Equally, a 60% ACOS on a launch campaign can be entirely rational if it is buying the review velocity and rank that make the next six months profitable.

The useful framing is break-even ACOS: your gross margin percentage after Amazon fees, COGS and shipping. If your margin is 35%, then a 35% ACOS is exactly break-even on that incremental sale. Anything below is profit, anything above is an investment you should be able to name a reason for.

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