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What is a Good ACOS? Target ACOS Explained for New Sellers
PPC Tools Team
7 min read
3/24/2026
A "good" ACOS on Amazon depends entirely on your profit margins and business goals. Your break even ACOS equals your profit margin before ad spend. Any ACOS below that number means you're making money on ad sales. During product launches you might accept a higher ACOS to build momentum, while established products should target an ACOS well below break even. This guide shows you how to calculate your numbers and set the right target for your situation.
If you've started running Amazon PPC, you've probably looked at your ACOS number and wondered whether it's good, bad, or somewhere in between. You might have seen people in forums say they run at 15% ACOS and panicked because yours is sitting at 45%. The reality is that a "good" ACOS is completely relative to your product, your margins, and your goals.
Quick Refresher on ACOS
ACOS (Advertising Cost of Sales) is your ad spend divided by your ad revenue, expressed as a percentage. If you spent $20 and made $100 in ad sales, your ACOS is 20%. The lower your ACOS, the less you're spending per dollar of ad revenue.
Why There's No Universal "Good" ACOS
A 25% ACOS could be incredibly profitable for one seller and a money loser for another. It all comes down to your profit margin.
If your product sells for $40 and your total costs (product cost, Amazon fees, shipping) come to $22, your profit margin before ads is $18, or 45%. That means any ACOS below 45% is profitable. A 25% ACOS on this product means you're pocketing $8 per ad sale after ad spend.
But if your product sells for $15 with $11 in costs, your margin is only $4, or about 27%. That same 25% ACOS means you're barely breaking even.
The number that matters isn't what everyone else's ACOS is. It's what your break even ACOS is.
How to Calculate Your Break Even ACOS
The formula is straightforward. Take your selling price, subtract all non-advertising costs (product cost, Amazon referral fee, FBA fees, shipping), and divide what's left by your selling price.
Break Even ACOS = (Selling Price - All Non-Ad Costs) / Selling Price x 100
For a product that sells at $30 with $18 in total costs, your break even ACOS is 40%. Anything below that is profit. Anything above that is a loss on that particular ad sale.
💡 Pro Tip: Not sure what your break-even ACOS is? Upload your campaign data and our tools calculate your true profitability at the keyword level.
Target ACOS vs Break Even ACOS
Your target ACOS should usually be lower than your break even ACOS because you probably want to actually make a profit on your ad sales, not just break even. How much lower depends on your goals.
If you're in profitability mode and your product is established with steady organic sales, you might target an ACOS that's 10 to 15 percentage points below your break even. So if break even is 40%, you'd target 25 to 30%.
If you're in launch mode with a new product that needs visibility, reviews, and sales velocity, you might target at or even slightly above your break even ACOS. You're investing in the product's long term success and organic ranking, not optimizing for immediate profit.
If you're in growth mode somewhere in between, you'd set your target ACOS close to break even, accepting thin margins on ad sales while benefiting from the organic sales that PPC activity helps generate.
ACOS Benchmarks by Category
While your own margins are what matter most, it can be helpful to know the general ranges. Most Amazon categories see average ACOS figures somewhere between 20% and 40%. Highly competitive categories like supplements, beauty, and consumer electronics often run higher because CPCs are expensive. Niche categories with less competition can see ACOS in the teens.
New products almost always have a higher ACOS initially because the listing doesn't have reviews, sales history, or organic rank yet. As your product matures and your conversion rate improves, your ACOS should naturally decrease even without changing your bids.
The Relationship Between ACOS and TACoS
ACOS only measures the efficiency of your ad spend relative to ad revenue. TACoS (Total Advertising Cost of Sales) measures your ad spend relative to your total revenue, including organic sales.
This distinction matters because one of the main benefits of PPC is boosting your organic ranking. If your ACOS is 30% but your TACoS is 12%, that means your ads are driving enough momentum to generate strong organic sales. You're spending 30 cents on every ad dollar, but only 12 cents on every total dollar. That's a healthy business.
Watch your TACoS over time. If it's decreasing while your overall sales grow, your PPC strategy is working even if your ACOS stays flat.
Setting Your Target ACOS in Practice
💡 Pro Tip: Our dashboard tracks both ACOS and TACoS over time so you can see the full picture of how your advertising drives your business.
- Calculate your break even ACOS for each product
- Decide which mode you're in: launch, growth, or profitability
- Set a target ACOS for each product based on that mode
- Review and adjust monthly as your products mature
The reason this matters is that your target ACOS should inform every bid decision you make. Keywords performing above your target need their bids reduced. Keywords performing below your target can handle higher bids to capture more volume. This is the core loop of PPC optimization.
If you'd rather not manage this manually across every keyword, ppctools.net is built around exactly this principle. You set your target ACOS and the system adjusts bids up or down based on each keyword's actual performance against that target, so your budget flows toward what's profitable automatically.
Key Takeaways
Frequently Asked Questions
What is the average ACOS on Amazon?
Most Amazon categories see average ACOS figures between 20% and 40%. Competitive categories like supplements and beauty tend to run higher, while niche categories with less competition can see ACOS in the teens. However, the average doesn't tell you much because your ideal ACOS depends on your specific margins.
What is the difference between ACOS and TACoS?
ACOS looks only at ad revenue: ad spend divided by sales from ad clicks. TACoS looks at total revenue: ad spend divided by all sales including organic. TACoS gives a better overall picture because effective advertising should also boost your organic sales.
Is a high ACOS always bad?
No. During a product launch, a higher ACOS (even above break even) can be a deliberate investment in visibility, sales velocity, and organic ranking. The key is knowing your break even number and making a conscious decision about how much you're willing to invest for growth.
How do I lower my target ACOS over time?
As your product gains reviews, sales history, and organic ranking, your conversion rate should improve naturally. This brings ACOS down without changing your bids. You can also actively lower ACOS by adding negative keywords to cut waste, reducing bids on underperforming terms, and focusing budget on your best converting keywords.
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