Free tool

Break-even ACOS calculator.

Work out the ACOS at which a product stops making money, the ACOS that keeps the margin you want, and the most a click is worth. It runs in your browser: nothing you type is sent anywhere.

Worked example — change any figure to use your own.

Break-even ACOS: 40.0%; Above this, every ad sale loses money.
Target ACOS: 30.0%; Keeps the margin you asked for.
Max bid at target: $0.90; At break-even: $1.20
Profit per unit before ads: $11.99; Referral fee: $4.50

The target you entered

ACOS 53.8%. At break-even it could have spent $311.88, so $108.12 of its spend bought sales at a loss.

How it is calculated.

Profit before ads = Price − Product cost − Referral fee − FBA fee − Other costs

Break-even ACOS = Profit before ads ÷ Price

Target ACOS = Break-even ACOS − Margin to keep

Max bid = Price × Target ACOS × Conversion rate

In the worked example a $29.99 product costs $7.50 to make and $5.40 to ship through FBA, pays a 15% referral fee and $0.60 of other costs. That leaves about $11.99 a unit before advertising, so advertising can take up to 40.0% of the price before the sale stops making money. Keeping a 10% margin brings the target down to 30.0%, and at a 10% conversion rate a click is worth about $0.90.

Illustration — figures are invented.

That $0.90 is the bid the target supports, worked through with its limits in the Amazon PPC bid formula. The 40.0% break-even line is also the one to judge an hour of the day against, in which hours dayparting should cut.

Why the dollars matter more than the ratio.

The target check turns ACOS back into money. In the example, $420 of spend brought $780 of sales at 53.8% ACOS. At break-even, those sales could have paid for about $311.88 of advertising, so about $108.12 of the spend bought sales at a loss. A ratio says a target is past the line; the dollars say whether it has lost enough to be worth changing.

That is the idea behind why an ACOS threshold cannot tell $8 from $800, and behind how Vendlen's rules decide when to act. In Vendlen, Break-even ACOS, Target ACOS and Max bid can be set once per product, Product Group or Product Line for the AI Analyst (how the economics resolve); Automation rules carry their own.

Questions sellers ask.

What is break-even ACOS?

The ACOS at which advertising uses up all the profit a sale makes. It equals your profit per unit before advertising divided by the selling price. Below it, an ad sale still makes money; above it, every ad sale loses some.

What is a good ACOS on Amazon?

One below your break-even ACOS, by as much margin as you want to keep. A product with a 40% break-even is profitable at 35% ACOS; a product with a 20% break-even loses money at 25%. That is why one ACOS target across a whole catalog is usually wrong for most of it.

How do you calculate the maximum bid?

Multiply the selling price by the ACOS you are willing to pay and by your conversion rate. At a $29.99 price, 30% target ACOS and a 10% conversion rate, the most a click is worth is about $0.90.

Which Amazon fees should I include?

The referral fee, which is a percentage of the price and 15% in most categories, the FBA fulfilment fee if Amazon ships the order, and any other per-unit cost such as storage, returns or prep. Check your own category: some referral rates are lower or higher, some change with the price, and a minimum fee applies to very cheap items.

What is the difference between ACOS and TACOS?

ACOS is ad spend divided by the sales those ads produced. TACOS divides the same ad spend by all of your sales, advertised or not, so it shows how much of the business depends on advertising. Break-even is an ACOS question: it is about whether an ad sale makes money.