ACOS (Advertising Cost of Sale) is the ratio of ad spend to ad-attributed revenue on Amazon, expressed as a percentage. It measures the efficiency of your PPC campaigns by showing how much you spend on advertising for every dollar of sales generated through ads.
ACOS directly determines whether your Amazon advertising is profitable. A lower ACOS means more efficient advertising spend, while a high ACOS can erode margins quickly. Understanding your target ACOS relative to your profit margin is essential for sustainable growth.
RIDGE reports include detailed ACOS benchmarking across competitors in your niche, historical ACOS trends, and recommended target ACOS ranges based on your unit economics. Our Monte Carlo simulation models ACOS variability to project realistic advertising profitability scenarios.
If you spend $25 on PPC ads and those ads generate $100 in sales, your ACOS is 25%. With a 35% profit margin before ad spend, this means 10% net margin after advertising.