Formula
ACoS = ad spend ÷ ad-attributed sales × 100
Worked example
A product sells for $40. Amazon fees are $10 and landed cost is $14, leaving $16 before advertising. If ads spend $10 to generate one attributed $40 sale, ACoS is 25%. The simplified contribution remaining after ads is $6: $40 minus $10 in fees, $14 in landed cost and $10 in ad spend.
Now keep the $40 price and $10 fees, but raise landed cost to $22. The same 25% ACoS leaves a $2 loss. Neither the ad spend nor attributed sales changed; the product economics did. These are product-level contribution examples, before overhead, payroll and other costs not included here.
Why it matters for profit
A lower ACoS is useful only in relation to the product’s margin and your objective. Compare each product with its own break-even ACoS, then set a lower target if you want to retain contribution after ads. An account average can conceal products losing money, even while the combined account appears healthy.
Use matching spend and attributed-sales definitions when comparing periods. Recent sales can still be attributed after the click, so an incomplete period may make performance appear worse. ACoS does not establish that an ad caused every attributed sale, and it does not measure incremental profit.
Check it on your numbers
Use Catalog Profit Check.
Read the worked lesson: Find the ACoS your product can afford.
Related terms
Source: Amazon Ads guidance. Platform rules checked October 30, 2026.