What Is a Good ACoS for Amazon Ads?

MARKETPLACE AND RETAIL MEDIA

Written & peer reviewed by
4 Darkroom team members

If you’ve ever checked your Amazon Ads dashboard and felt your stomach drop, you’re normal.

One day your ACoS is 22%. The next it’s 38%. Nothing “dramatic” changed (at least not that you can see), but suddenly you’re wondering whether you should pause campaigns, slash bids, or just stop looking at the dashboard for a week.

Here’s the truth that saves a lot of time:

There is no universal “good ACoS.” Amazon Ads says as much. What counts as “good” depends on your margin and what you’re trying to accomplish with ads.

So instead of chasing someone else’s benchmark, let’s build a target that actually fits your business.

The quick answer

A good ACoS is the ACoS that makes sense for your unit economics and your goal.

If you’re in profit mode, “good” usually means staying comfortably below break-even ACoS. If you’re launching a product or intentionally pushing growth, “good” can mean running near break-even or even above it for a short period, as long as you have a plan and you are tracking the right guardrails.

Amazon Ads recommends using your profit margin and break-even ACoS as the starting point, because that’s what keeps the whole conversation grounded in reality.

What is ACoS for Amazon ads?

ACoS (Advertising Cost of Sale) is simply the percentage of ad-attributed sales you spend on ads:

ACoS = (Ad Spend ÷ Ad Sales) × 100

If you spend $500 and Amazon attributes $2,000 in sales, your ACoS is 25%. Simple enough.

What’s not simple is interpreting it, because ACoS is a scoreboard. It tells you how expensive those sales were, but it does not tell you whether that spend was smart for your business.

The number that matters first: break-even ACoS

Most “good ACoS” advice skips the part that actually determines whether the number is good.

Break-even ACoS is the point where you’re making roughly zero contribution margin on ad-attributed sales. Amazon Ads ties break-even ACoS directly to your profit margin and frames it as the baseline you should understand before setting targets.

A practical shorthand looks like this:

Break-even ACoS (%) = your profit margin (%)

But only if you are calculating margin like a grown-up.

A lot of people use COGS-only margin (or a simplified margin that ignores the messier costs). That makes break-even ACoS look better than it really is. Ad Badger calls out that you should include “other expenses,” not just COGS, when calculating profit margin for break-even ACoS.

On Amazon, those “other expenses” usually include things like referral fees, fulfillment, promos, and a realistic allowance for returns. You don’t need accounting perfection here. You just need an honest variable cost stack so you stop setting targets that your economics cannot support.

A break-even ACoS example (realistic, not wishful thinking)

Let’s say you sell a product for $40.

After COGS, Amazon fees, fulfillment, and the other variable stuff that shows up on a real Amazon P&L, your total variable costs come out to $27. That leaves $13 of contribution profit before ads.

$13 divided by $40 is 32.5%.

So your break-even ACoS is about 32.5%.

That single number makes everything else cleaner. You no longer have to argue whether “25% is good.” You can see whether 25% is good for you.

So what is a “good” ACoS?

You will see plenty of benchmark answers online. Jungle Scout, for example, frames ACoS ranges as under 25% being low, 25% to 40% being average, and over 40% being high.

Those ranges are useful as context, but they’re not a target. Your target should be driven by break-even ACoS and by what the campaign is supposed to do.

Here’s an operator-friendly way to set it:

If you’re protecting profit on mature, proven SKUs, you typically want your ACoS meaningfully below break-even. Think “below break-even with breathing room,” not “barely under.”

If you’re scaling a winner that already converts well, you can often live closer to break-even, because the goal is to buy more of what already works without destroying contribution.

If you’re launching or intentionally pushing discovery, you might allow ACoS to sit at break-even or above for a time-boxed window, because you’re paying to buy data and sales velocity. The mistake isn’t “high ACoS.” The mistake is letting high ACoS become permanent with no exit plan.

This is also why the popular “15% to 25% is good” answer can be dangerously misleading. Scale Insights references that kind of range as a common target, but the range only works if your margins can support it.

The metric that keeps you from lying to yourself: TACoS

ACoS looks at ad-attributed sales. That’s useful, but it can also trick you.

TACoS (Total Advertising Cost of Sale) measures ad spend against total sales, including organic:

TACoS = Ad Spend ÷ Total Sales

Blue Wheel defines TACoS this way and emphasizes that it reflects the broader business impact because organic sales are included.

This is where the story gets interesting.

You can have a “bad” ACoS while TACoS improves because ads are lifting organic sales. That can be exactly what you want during growth phases. You can also have a “great” ACoS while TACoS creeps up because you’re only buying branded conversions and starving your discovery engine.

A simple way to use both without overcomplicating it is:
ACoS helps you steer campaigns. TACoS helps you steer the business.

Why your ACoS is high (and what to do about it)

When ACoS goes sideways, most accounts are dealing with one of two problems.

The first is traffic cost. Clicks got more expensive, you drifted into tougher auctions, or your targeting is too broad and you’re paying for curiosity clicks.

The second is conversion. You’re getting clicks, but the listing is not closing them. This is the most common one, and it is the reason so many “ACoS optimization” efforts fail. You can tweak bids all day, but if your offer and listing experience are weak, ACoS fights back.

Optmyzr’s Amazon strategy framing is a good reminder here: start with conversion readiness, then refine targeting, then build structure and monitoring. (Their strategy piece is published May 27, 2025.)

If your instinct is “we need to lower ACoS,” pause and ask a better question:
Are we paying too much for clicks, or are we not converting the clicks we already bought?

If it’s clicks, your fix is usually query hygiene and intent separation. If it’s conversion, your fix is usually the offer and the listing. And if it’s both, you handle conversion first, because improving conversion rate lowers ACoS without you having to shrink your entire reach.

A weekly rhythm that keeps ACoS from drifting

Most teams do not lose on Amazon because they do not know what ACoS is. They lose because they check it randomly and react emotionally.

A simple rhythm works better. Once a week, you clean up wasted search terms and prevent irrelevant spend from piling up. Midweek, you adjust bids on targets with enough data to be meaningful. At the end of the week, you reallocate budgets toward winners so experiments do not quietly cannibalize the account.

Then, once a month, you reset targets if your economics changed. Price moved. Fees changed. You ran heavier promos. Returns spiked. Any of those can change break-even ACoS, which means your “good ACoS” target should move too.

Copy-paste break-even ACoS worksheet

If you want a quick way to do this per SKU, use this template:

Selling price (A): $
COGS (B): $
Referral fee (C): $
Fulfillment (D): $
Inbound freight/prep (E): $
Promos/coupons (F): $
Returns allowance (G): $
Other variable costs (H): $

Total variable costs (T) = B + C + D + E + F + G + H
Contribution profit (P) = A − T
Contribution margin % (M) = (P ÷ A) × 100

Break-even ACoS % = M

FAQs

Is 30% ACoS good on Amazon?

It’s good if it’s below your break-even ACoS. If your true margin is 40%, then 30% is profitable. If your true margin is 20%, then 30% is probably losing contribution on ad-attributed sales. Amazon Ads ties this directly to profit margin and break-even logic.

What is a good ACoS for a new product?

For launches, “good” can mean running near break-even or above for a short period, because you’re paying for data and velocity. The important part is having a time-box and watching TACoS so you don’t normalize unprofitable spend.