ACoS measures ad spend relative to attributed sales; ROAS reverses that ratio; TACoS compares ad spend with total business sales. None is a standalone profit measure. The useful target depends on contribution margin, reporting scope and the purpose of the campaign.

Calculate the three metrics

Metric	Formula	Hypothetical inputs	Result
ACoS	Spend / attributed sales × 100	£500 / £2,000	25%
ROAS	Attributed sales / spend	£2,000 / £500	4.0
TACoS	Spend / total business sales × 100	£500 / £5,000	10%

Use the same currency and intended account or product scope. Total business sales already include purchases that may receive ad credit; do not add attributed sales to that total. An order-date sales report and an interaction-date advertising report need not reconcile day by day. Amazon campaign metrics.

If a denominator is zero, the ratio is undefined. If a report is missing, label it unavailable rather than manufacturing a zero. Aggregate spend and sales before calculating ratios; averaging campaign ACoS percentages gives the wrong result when campaign sizes differ.

Convert ACoS and ROAS

When both use the same positive spend and sales, ROAS = 100 / ACoS expressed as a percentage.

ACoS	ROAS
10%	10.00
20%	5.00
25%	4.00
30%	3.33
40%	2.50
50%	2.00

There is no universal profitability label for these rows. A product with 25% contribution margin loses contribution after ads at 30% ACoS; a product with 40% contribution margin has room remaining on the same simplified basis.

Derive the target from economics

Hypothetical order: £30 revenue minus £18 variable costs leaves £12 contribution before advertising, or 40%. Break-even ACoS is therefore 40%. To retain £6 per order after ads, allow £6 advertising: target ACoS = £6 / £30 = 20%.

Include applicable fees, fulfilment, discounts and expected returns; align tax treatment with the revenue denominator. Fixed overhead is not covered unless your target leaves an allowance for it. See the break-even worksheet.

A launch can have an explicitly approved loss budget, but calling it investment does not make it profitable or guarantee future ranking or reviews. Define its ceiling and review conditions separately.

Interpret TACoS without claiming causation

In a hypothetical comparison, spend remains £1,000 while total sales rise from £10,000 to £13,000. TACoS falls from 10% to 7.69%. This establishes that revenue grew faster than spend. It does not establish that advertising caused organic growth: price, seasonality, stock and other marketing could explain the change.

Similarly, rising TACoS can reflect lower sales, greater spending or both. Inspect the numerator and denominator before cutting budgets. Do not infer organic sales by subtraction unless the sales datasets are genuinely comparable in scope and timing.

Common decision mistakes

• Treating low ACoS as the sole objective: it can coexist with declining volume.
• Applying one target across products with different margins.
• Treating a category average as an economic threshold without a defined source and sample.
• Comparing immature recent reports with mature older ones.
• Adding NTB sales or view-attributed sales to a total that already includes them.

Amazon's conversion definitions vary by metric and advertiser type. Save the selected definition and refresh the same period after its window and reporting delay. Amazon conversion guidance.

How often should targets change?

Recalculate when price or costs change and review against your business priorities. Check daily for operational problems, but judge performance using enough mature data for the decision. No fixed click count or number of days guarantees stability.

Can a ROAS target replace ACoS?

They are equivalent ratios on the same basis. Available campaign controls vary; check the current campaign interface rather than assuming every format offers a target-ACoS control. For a starting bid estimate, use target ACoS to bid.

Related Arctavia resources

Use these supporting pages to compare Amazon PPC operating models and implementation choices.

• Amazon Ad Rejections: Check Claims, Images and Destinations
• Amazon Ads ACoS Suddenly Increased: What to Check First
• Amazon Ads ML Bid Review: Guardrails Before Aggression
• Amazon PPC Automation: Data, Decisions and Operating Controls
• Amazon PPC Automation Migration Checklist
• Amazon PPC Automation vs Agency: Which Operating Model Fits Better?