Glossary · MarketplacesTOFU
ACoS (Advertising Cost of Sale)
The short answer
Break-even ACoS
Your break-even ACoS equals your contribution margin percentage on the product after marketplace commission, fulfilment, storage and returns. If a product leaves 30% after all those costs, any ACoS above 30% loses money on the ad-driven sale.
ACoS vs TACoS
ACoS and ROAS conversion
| ACoS | Equivalent ROAS |
|---|---|
| 10% | 10x |
| 20% | 5x |
| 25% | 4x |
| 33% | 3x |
| 50% | 2x |
See TACoS and Amazon Ads.
ACoS in practice
A product earns ₹1,00,000 in ad-attributed sales on ₹25,000 of ad spend: ACoS is 25%. If its profit margin before advertising is 30%, the ads are profitable; at a 20% margin, they lose money on ad-driven sales.
How to improve ACoS
- Pause search terms that spend without converting
- Improve listings to raise conversion rates
- Adjust bids by product margin
- Use exact match for proven terms
ACoS on Indian marketplaces
Amazon India and other marketplaces report ACoS or similar metrics for sponsored ads. Because marketplace fees, shipping and returns vary by category, the profitable ACoS differs widely — compare it with your margin after marketplace fees.
Common ACoS mistakes
- Using one target ACoS for every product
- Ignoring organic sales lift from ads
- Cutting ads on products that build ranking
Frequently asked questions
What's a good ACoS on Amazon India?
Whatever sits below your product's break-even ACoS. Launch campaigns may deliberately run higher to build rank.
Should every product have the same ACoS target?
No. Different margins need different targets.
Is a lower ACoS always better?
Not always. Very low ACoS can mean under-investing in visibility and growth. Balance ACoS with sales growth and TACoS.
Does ACoS include organic sales?
No — only sales attributed to ads. TACoS uses total sales.
What is the difference between ACoS and TACoS?
ACoS divides ad spend by ad sales; TACoS divides ad spend by total sales, including organic.
Is a low ACoS always good?
Not always — very low ACoS may mean you're under-investing in growth.
How does ACoS relate to ROAS?
ACoS is the inverse of ROAS expressed as a percentage: a 25% ACoS equals a ROAS of 4.
What is a good ACoS on Amazon India?
One below your margin after fees — it depends on product economics.
Should new products have higher ACoS?
Often temporarily, while building sales velocity and reviews.
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