Key takeaways
- Amazon publishes one formula only: ACOS = (ad spend divided by ad revenue) times 100. The denominator is ad-attributed sales.
- Amazon Ads names TACOS and says it shows whether total sales are growing against ad spend, but publishes no calculation for it anywhere.
- Amazon's one hard rule: ACOS has to stay below your profit margin, or the campaign spends more than it earns.
- Amazon refuses to name a good ACOS, because it depends on industry, company size and campaign frequency.
- ACOS can worsen 5 points while total sales grow 50% and TACOS holds flat. Cutting spend on the ACOS signal cuts the month that worked.
ACOS vs TACOS is the difference between measuring your ads and measuring your business. ACOS is an Amazon metric with an official formula. TACOS is not: Amazon Ads names it, but it has never published a calculation for it. That gap is the whole reason the comparison matters.
What ACOS is, in Amazon's own words
Amazon Ads defines advertising cost of sales as a measure of pay-per-click campaigns: "Amazon advertising cost of sales (ACOS) is a metric used to measure Amazon pay-per-click (PPC) advertising campaigns." The formula Amazon publishes is:
ACOS = (ad spend ÷ ad revenue) × 100
Amazon's own example: "if you spent $50 on an ad campaign and earned $100 from it, your Amazon ACOS would be 50%." Return on ad spend is the same relationship upside down. Amazon calls ROAS "the inverse of Amazon ACOS", calculated as ad revenue divided by ad spend, which makes ROAS 2 in that example.
Note what sits in the denominator: ad revenue. Not your revenue. Only the sales Amazon attributed to the campaign.
Amazon also refuses to give you a target, and it is right to. "There isn't a definitive number for a good Amazon ACOS," the guide says, because it "is dependent on your industry, company size, and campaign frequency, among other variables." What it does give you is a hard floor: "In order to maintain a profit, your Amazon ACOS needs to be lower than your profit margin." Otherwise "you will be spending more on ads than you're earning."
What TACOS is, and what Amazon does not say about it
Total advertising cost of sales is the same spend measured against everything you sold, organic sales included.
Amazon Ads does use the term. In its guide on holiday advertising myths it expands the acronym as "total advertising cost of sales (TACOS)" and says what it is for:
TACOS reveals whether your total sales (organic and paid) are growing in relation to your ad spend.
What Amazon does not do on that page, or on its ACOS guide, is publish a formula. The calculation sellers use is a community convention, not an Amazon definition:
TACOS = (ad spend ÷ total sales) × 100
Treat that as what it is. The inputs are yours, the arithmetic is yours, and no Seller Central report will hand you the number with Amazon's name on it. The honest version of this metric is the one you can reconstruct from your own figures.
ACOS vs TACOS: the criteria that actually decide
| What you are deciding | ACOS | TACOS |
|---|---|---|
| Denominator | Ad-attributed sales only | All sales, organic and paid |
| Published by Amazon | Yes, with a formula | Named, with no formula |
| Answers | Is this campaign efficient? | Is the business growing on ads? |
| Blind to | Every organic sale you made | Which campaign caused what |
| Breaks when | Organic sales carry the brand | Ad spend is tiny next to revenue |
| Compare against | Your profit margin | Your own trend, month over month |
A full numeric example
One account, three months. Same catalogue.
Month 1. Total sales $100,000. Ad-attributed sales $30,000. Ad spend $6,000.
- ACOS = 6,000 ÷ 30,000 × 100 = 20%
- TACOS = 6,000 ÷ 100,000 × 100 = 6%
Month 2. You push harder. Ad spend $9,000. Ad-attributed sales $36,000. Total sales $150,000.
- ACOS = 9,000 ÷ 36,000 × 100 = 25%
- TACOS = 9,000 ÷ 150,000 × 100 = 6%
ACOS got worse by 5 points. Every ads dashboard in the world flags that red. Meanwhile total sales grew 50% and the share of revenue going to ads did not move. Cut spend on the ACOS signal and you cut the month that worked.
Month 3. Ad spend back to $6,000. Ad-attributed sales $30,000. But total sales fall to $60,000.
- ACOS = 6,000 ÷ 30,000 × 100 = 20%
- TACOS = 6,000 ÷ 60,000 × 100 = 10%
ACOS is identical to month 1. Nothing in the campaign changed. But half the business is now bought rather than found, and TACOS is the only one of the two numbers that says so.
Which one to use, by situation
Use ACOS when the question is about a campaign. Should this bid go up? Is this keyword paying? Should this ASIN run at all? ACOS answers those, and Amazon's floor applies: below your profit margin, or the campaign loses money. For the mechanics underneath, see the Amazon PPC guide and the differences between Sponsored Products and Sponsored Brands.
Use TACOS when the question is about the business. Is the brand getting stronger or am I renting demand? Can I afford this spend at all? Is organic picking up as ads do their work?
Use both when a number surprises you. An ACOS spike with flat TACOS usually means growth. An ACOS spike with rising TACOS means you are paying more for the same business. Same first symptom, opposite diagnosis.
One structural warning, too. Amazon is bundling formats into single campaigns: Full-Funnel Campaigns opened in US open beta on 29 September 2026 and spans sponsored ads, display, video and streaming TV at once. The more formats share one campaign, the less a single ACOS figure tells you about any of them, and the more work TACOS has to do.
One practical warning on the inputs. ACOS can also mislead because of what Amazon puts in the numerator: your real cost per click can land above your bid, which is covered in why your Amazon Ads CPC is higher than your bid. And neither metric knows your margin, which has to come from your own cost base: how to calculate Amazon FBA profit walks through the costs that land after the sale.
The short version
ACOS is Amazon's metric and it grades your campaigns. TACOS is your metric and it grades your decision to advertise. ACOS has a formula from Amazon and a hard rule attached to it: stay under your profit margin. TACOS has a name from Amazon and nothing else, so you build it yourself from total sales and total spend.
Which makes TACOS the honest one. Not because it is more accurate, but because nobody hands it to you pre-flattered. Every input is a number you had to find.
“TACOS reveals whether your total sales (organic and paid) are growing in relation to your ad spend.”
Amazon Ads
Sources
- Amazon Ads: What is advertising cost of sales (ACOS)? advertising.amazon.com
- Amazon Ads: Holiday advertising myths, what experts want you to know advertising.amazon.com
- Amazon Ads: Grow total sales with Full-Funnel Campaigns (29-09-2026) advertising.amazon.com
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