Let’s say you began doing Amazon advertising and your ads are up and running by now. That is awesome, but there might be a catch.

You might be getting the wrong calculations of your true Advertising Cost of Sales (ACoS). Or maybe you don’t understand it at all. In this article, we will discuss what a true ACoS is, how to calculate it, and how to determine when an ACoS is a good ACoS or when it is a bad ACoS.

Let’s start with the easy part…

ACoS stands for Advertising Cost of Sales. It is not the most common PPC jargon so if you are new to Amazon advertising don’t be surprised if you haven’t come across it.

Your ACoS percentage is how much you spend on advertising per dollar of revenue you make through PPC.

Here’s how to calculate your ACoS:

ACoS = Total Ads Spend ÷ Total Sales

Let’s break it down to make it easy to understand.

  • Your product sells for $50
  • Your advertising campaign costs $100
  • You sell 20 products with total revenue of $1000
  • Your ACoS appears as 10%

Total Dollars Spent on Ads: $100

Total Sales Made Through Ads: $1000

100 divided by 1000 = 10%

So… if you spent $100 on your Amazon advertising and it resulted in a single sale of $50, your Advertising Cost of Sales would be 10%. In other words, you’re spending only 10% on ads to make one dollar of sales with that ad campaign. Now you might be wondering if it is that good or b