Break-even ACoS calculator
Break-even ACoS is not a rule of thumb, it is your contribution margin. Enter your price, cost, referral fee and fulfilment and this returns the advertising cost of sale at which a campaign stops making money — plus what that implies for a total ACoS target across the account.
INPUTS
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FORMULA
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On Amazon the fees come out before advertising does, which is why a storefront margin figure will mislead you here.
- The calculator
What ACoS can you actually afford?
Six inputs, all of which you can read off a settlement report. Everything updates as you type.
Formula: contribution = (price − cost − referral fee − fulfilment) × (1 − return rate). Break-even ACoS = contribution ÷ price. Break-even TACoS = break-even ACoS × (1 − organic share), because TACoS measures ad spend against all sales rather than only attributed ones.
- Reading it
Break-even ACoS is your contribution margin
Not a benchmark, not a category average, and not the number your competitor quoted at a conference.
The two figures are the same thing expressed differently. If a unit leaves you 32% of the selling price after cost, referral fee, fulfilment and returns, then 32% is exactly the ACoS at which advertising consumes all of it. There is no industry answer to what ACoS you should target, because the answer is a property of your product and your fee structure.
The TACoS figure matters more than most sellers treat it. ACoS only counts sales the ads claimed. TACoS measures the same spend against everything you sold, so it falls as organic rank improves even when campaign efficiency has not changed — which is why it is the better number to steer a whole account by.
- Run it per ASIN, not once for the catalogue
- Launch periods deliberately run above break-even to buy rank
- A falling TACoS with flat ACoS means organic is doing more work
- Getting it wrong
Four ways sellers miscalculate this
Each of these makes the affordable ACoS look higher than it is.
Forgetting the referral fee
It comes out before advertising does. Using a storefront gross margin on an Amazon calculation typically overstates affordable ACoS by fifteen points.
Underestimating fulfilment
Weight handling, oversize bands and storage all sit on top of the pick and pack fee. Read it from a settlement report rather than the fee estimator.
Treating returns as free
On a returned unit you lose the fulfilment fee and frequently the unit itself. A six per cent return rate is not a six per cent problem.
Judging launches on ACoS
A launch buys rank and is expected to run above break-even for a period. Killing it on ACoS at week three is how sellers pay for the expensive part and then skip the payoff.
What ACoS and TACoS each measure, and when to use which, is set out on our ACoS definition.
- Questions
Break-even ACoS FAQs
What is a good ACoS on Amazon?
Any ACoS comfortably below your break-even, which the calculator above works out from your own fee structure. There is no category benchmark worth using: two sellers in the same category with different cost prices have completely different answers.
What is the difference between ACoS and TACoS?
ACoS is ad spend divided by ad-attributed sales. TACoS is the same spend divided by total sales, including organic. TACoS falls as organic rank improves, which makes it the better measure of whether advertising is building anything durable.
Should I ever run above break-even ACoS?
Yes, deliberately and with an end date. Launches, new variations and category entries all buy rank at a planned loss. The mistake is drifting above break-even without noticing, which is what an unattended campaign does.
Do I include storage and long-term fees?
Not in this calculation, because they are not per-unit at the point of sale. Track them separately — on slow-moving inventory they can exceed the advertising cost entirely.
Why does the calculator ask for organic share?
Only to convert break-even ACoS into break-even TACoS. If sixty per cent of your sales are organic, the same ad spend represents a much smaller share of total revenue, and the TACoS figure shows you that ceiling.
How does this differ from break-even ROAS?
Same idea, inverted, with Amazon fees in the middle. If you also advertise on your own storefront, the break-even ROAS calculator handles that side.
- Next
Related tools and reading
DEFINITION
The formula, ACoS against TACoS, and why break-even equals contribution margin.
CHECKLIST
Thirty-eight checks across catalogue data, copy, imagery, keywords and conversion.
CASE STUDY
Buy-box share up 44% and returns down 17%, after one catalogue problem was found behind both.
Spending above break-even without meaning to?
It is the most common thing we find on marketplace accounts, and it rarely shows up in the campaign report. The free audit covers account health, catalogue and pricing policy in five working days.