Amazon Acos vs Tcos: What They Are, Why They Matter, and How to Use Them to Win on Amazon

April 24, 2025 Amazon Advertising

If you’re an Amazon seller running advertising campaigns, two key performance metrics will make or break your profitability: ACOS (Advertising Cost of Sale) and TCOS (Total Cost of Sale).

They might sound similar—but they’re not. And understanding the difference between them, when to use which, and how they fit into your larger Amazon business strategy is essential for long-term success.

In this guide, we’ll explore:

What ACOS and TCOS actually mean
The key differences between them
Why both are crucial (but in different ways)
How to calculate each one correctly
Real-world examples
How to make data-driven decisions on Amazon using both

What is ACOS? (Advertising Cost of Sale)

ACOS is an advertising metric used on Amazon to measure how efficiently your ad spend is converting into revenue.

💡 Formula:

$ACOS = \left( \frac{\text{Ad Spend}}{\text{Ad Sales}} \right) \times 100$

✅ Example:

You spent $100 on ads
You made $500 in ad-attributed sales
Your ACOS = (100 / 500) × 100 = 20%

📌 What It Means:

A 20% ACOS means you spent 20 cents in ads to generate every $1 in revenue from your ads.

ACOS is best used to evaluate how profitable your ads alone are. It helps you decide if a specific ad campaign, keyword, or product targeting strategy is working.

What is TCOS? (Total Cost of Sale)

TCOS, also known as TACOS (Total Advertising Cost of Sale), is a bigger picture metric. It considers your total revenue—not just ad-attributed revenue.

💡 Formula:

$TCOS = \left( \frac{\text{Ad Spend}}{\text{Total Sales}} \right) \times 100$

✅ Example:

You spent $100 on ads
You made $500 in total sales (including organic and ad-attributed)
Your TCOS = (100 / 500) × 100 = 20%

If your total sales were $1,000, then TCOS = (100 / 1000) × 100 = 10%

📌 What It Means:

A 10% TCOS means you're spending 10 cents on advertising for every $1 in total revenue, including organic sales.

TCOS helps you understand how ads are influencing your total business performance, not just direct conversions.

ACOS vs. TCOS: Key Differences

Feature	ACOS	TCOS / TACOS
Measures	Ad spend vs. ad-attributed revenue	Ad spend vs. total revenue
Focus	Campaign-level profitability	Business-level efficiency
Viewpoint	Short-term (direct performance)	Long-term (brand growth + organic lift)
Useful for	Campaign optimization	Strategic budgeting and profitability
Low value means	Higher ad efficiency	Strong business profitability

Why Both Metrics Matter

✅ Why ACOS is Important

Lets you optimize ad spend at the campaign, keyword, or product level
Helps you identify poor performers quickly
Crucial for short-term profitability

If your break-even ACOS (based on your margins) is 30%, anything above that means you're likely losing money on ads.

✅ Why TCOS is Important

Tracks how ads lift your overall business
Shows whether your ads are leading to organic sales growth
Helps determine if you’re investing in brand equity

Sometimes a high ACOS is fine if TCOS is low, because the ads are helping drive organic sales that offset the cost.

How to Use ACOS in Seller Central

Here’s how to put ACOS to work inside your Amazon Advertising Console:

1. Set Target ACOS by Product

Know your profit margin. If your net margin after Amazon fees and costs is 30%, aim for an ACOS below 30% to stay profitable.

2. Monitor Campaign Performance

Use the campaign manager to filter and sort campaigns by ACOS. Pause or adjust anything consistently over your target.

3. Use Search Term Reports

Find high-ACOS keywords or irrelevant queries. Negative match or bid down on keywords that don’t convert profitably.

4. Segment by Product or Goal

High ACOS might be okay for launch campaigns (where you’re aiming to gain visibility).
Use lower ACOS targets for profit-focused campaigns on mature products.

How to Use TCOS to Manage the Bigger Picture

While ACOS optimizes campaigns, TCOS ensures you’re not losing money across your entire business.

1. Benchmark TCOS Over Time

Track TCOS weekly or monthly. A declining TCOS trend means you're building organic momentum.

2. Use for Strategic Budgeting

Let’s say your TCOS is 8% and your margin is 30%. You now know you’re spending just a small portion of revenue to grow the whole business—great! You might scale up ads confidently.

3. Compare Product Lines

Track TCOS across different products. If Product A has a TCOS of 6% and Product B has 18%, you may want to shift your budget toward the more efficient performer.

4. Measure Brand Impact

Ads that lead to better rankings and reviews will lower your TCOS over time as organic sales increase.

When to Use Each Metric

Situation	Use ACOS	Use TCOS
Optimizing individual campaigns or keywords	✅
Checking product-level ad profitability	✅	✅
Deciding if advertising is helping overall		✅
Launching new products	✅	✅
Managing total account profitability		✅
Setting ad budgets based on ROI	✅	✅

Best Practices for Managing ACOS and TCOS Together

✅ Track Both Regularly

Use the Campaign Manager for ACOS. Use your business reports in Seller Central + advertising data to calculate TCOS.

✅ Know Your Break-Even Points

If you don’t know your margins, you can’t set realistic targets. Calculate your profit after fees, COGS, shipping, and returns.

✅ Don’t Obsess Over ACOS Alone

A campaign with 40% ACOS might be worth it if it's lifting your product to page one and driving organic sales. Always check TCOS too.

✅ Use TCOS as a Long-Term Compass

You might run a high-ACOS campaign at a loss intentionally to build ranking. Just make sure your TCOS doesn’t spiral, or you’ll lose money overall.

✅ Look for Trends, Not Just Snapshots

Track ACOS and TCOS over weeks—not just days. Ads take time to influence behavior and rankings.

Tools to Help You Analyze ACOS and TCOS

Amazon Advertising Console: See campaign-level ACOS, CTR, CPC, and conversions.
Business Reports (Seller Central): Use “Detail Page Sales and Traffic” report for total sales.
Third-Party Tools: Helium 10, Jungle Scout, Sellics, or Perpetua offer advanced insights and TCOS calculations.
Spreadsheets: Export data weekly and calculate TCOS using your ad spend and total revenue.

Common Mistakes to Avoid

❌ Chasing low ACOS blindly – you might sacrifice growth and rankings.
❌ Ignoring TCOS – you won’t know if your ads are profitable long-term.
❌ Not segmenting by goal – treat campaigns for launching, ranking, or profit differently.
❌ Misreading organic growth – some sellers lower ad spend too fast and lose organic momentum.

Final Thoughts: Smart Selling Requires Both ACOS and TCOS

Success on Amazon is not just about being profitable today—it's about building a sustainable brand that grows organically over time.

Think of ACOS as your tactical lens—zooming in to improve specific ad campaigns.

Think of TCOS as your strategic lens—zooming out to see how your advertising investment affects the entire business.

When you master both, you’ll make smarter ad decisions, scale faster, and avoid burning money chasing the wrong metrics.

If you’d like, I can help you build a spreadsheet to automatically calculate and monitor ACOS and TCOS, or walk you through real-world Amazon Seller Central screenshots to apply this practically. Just let me know!

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Amazon Acos vs Tcos: What They Are, Why They Matter, and How to Use Them to Win on Amazon

What is ACOS? (Advertising Cost of Sale)

💡 Formula:

✅ Example:

📌 What It Means:

What is TCOS? (Total Cost of Sale)

💡 Formula:

✅ Example:

📌 What It Means:

ACOS vs. TCOS: Key Differences

Why Both Metrics Matter

✅ Why ACOS is Important

✅ Why TCOS is Important

How to Use ACOS in Seller Central

1. Set Target ACOS by Product

2. Monitor Campaign Performance

3. Use Search Term Reports

4. Segment by Product or Goal

How to Use TCOS to Manage the Bigger Picture

1. Benchmark TCOS Over Time

2. Use for Strategic Budgeting

3. Compare Product Lines

4. Measure Brand Impact

When to Use Each Metric

Best Practices for Managing ACOS and TCOS Together

✅ Track Both Regularly

✅ Know Your Break-Even Points

✅ Don’t Obsess Over ACOS Alone

✅ Use TCOS as a Long-Term Compass

✅ Look for Trends, Not Just Snapshots

Tools to Help You Analyze ACOS and TCOS

Common Mistakes to Avoid

Final Thoughts: Smart Selling Requires Both ACOS and TCOS

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