Planning Amazon Ads with ROAS & ACoS (Targets That Protect Profit)

ACoS = Ad spend ÷ Ad revenue × 100. ROAS = Ad revenue ÷ Ad spend. A 25% ACoS is a 4× ROAS; a 50% ACoS is a 2× ROAS. Amazon reports ACoS, most other channels talk ROAS — you need to move between them fluently.

Neither says anything about profit by itself. A 4× ROAS is excellent on a 40% margin product and a loss on a 20% margin product — which is why the next number matters more.

Before ads, work out profit margin after every cost except advertising: price minus product cost, FBA and referral fees, shipping. That percentage IS your break-even ACoS — spend exactly it and the sale makes nothing.

Example: a $30 product with $19.50 of costs leaves $10.50 — a 35% margin, so 35% break-even ACoS (≈2.9× break-even ROAS). At a 25% ACoS you keep $3 per ad-driven sale; at 40% you pay for the privilege.

Pick a target ACoS comfortably below break-even — many sellers aim for half to two-thirds of it for profitable growth, or run at break-even deliberately for launches and ranking, as a costed decision rather than a surprise.

Then budget from the target: if you want $9,000 of ad sales at a 23% target ACoS, plan about $2,070 of spend. Watch TACoS (ad spend ÷ total revenue) alongside it — a healthy account sees TACoS drift down as organic sales compound.