How to work out your break-even ACoS
ACoS is ad spend divided by ad-attributed sales. Your break-even ACoS is your profit margin before advertising: selling price minus product cost, Amazon referral and fulfilment fees, and shipping, divided by selling price.
If that margin is 30%, an ACoS of 30% means ads are breaking even; anything lower is profit. ACoS is the inverse of ROAS, so a 17% ACoS equals about 5.9x ROAS and 28% equals about 3.6x.
- Break-even ACoS = margin before ads
- ROAS = 100 ÷ ACoS
- Target ACoS for growth: at or a little below break-even
- Target ACoS for profit: well below break-even
Where the account started
The account was bleeding on broad-match keywords at 28% ACoS: spend was spread across search terms that clicked but rarely converted.
What changed
The work was structural and weekly, not a one-time fix.
- Restructured the campaign hierarchy
- Moved top-performing search terms to exact match
- Added negative keywords every week from the search-term report
The result
ACoS fell from 28% to 17%, and conversion efficiency improved 18%. In ROAS terms, that is a move from about 3.6x to about 5.9x on the same product set.
With that foundation in place, the same portfolio scaled to ₹17L a month at up to 7x ROAS.
When a higher ACoS is the right call
During a launch or a festive sale, it can be worth running above break-even to gain ranking and reviews that pay back in organic sales later. Watch TACoS (ad spend ÷ total sales, including organic): if it falls over time while ACoS is high, ads are building the business, not just buying sales.