How to Lower ACoS on Amazon Without Killing Your Sales
A high ACoS is one of the most common complaints we hear from Amazon sellers, and the usual reaction, cutting bids across the board, often kills sales along with the waste. Lowering ACoS well means knowing what number you can actually afford, then removing spend that does not convert while protecting what does. Here is the process we use.
Start with the right numbers
ACoS (advertising cost of sales) is ad spend divided by ad-attributed sales. TACoS is ad spend divided by your total sales, including organic. Both matter: ACoS tells you how efficient the ads are, TACoS tells you how much of the whole business the ads are carrying.
Before changing anything, calculate your break-even ACoS: your profit margin per unit before advertising, as a percentage of the selling price. A simple example with made-up numbers:
| Item | Per unit |
|---|---|
| Selling price | $30.00 |
| Product cost + inbound freight | $8.00 |
| Amazon referral + FBA fees (example) | $10.50 |
| Profit before ads | $11.50 |
| Break-even ACoS | about 38% |
In this example, an ACoS of 30% is profitable and 45% loses money on every ad sale. Use your own fees from Seller Central, because referral and fulfillment fees vary by category, size and price. Then set a target ACoS by goal: below break-even for a mature product, possibly above it for a launch where you are deliberately buying ranking and reviews for a limited time.
1. Cut wasted search terms first
Open the search term report for the last 30 to 60 days and sort by spend. Look for terms with meaningful clicks and no orders, or with orders at an ACoS far above target. Add clearly irrelevant ones as negative exact or negative phrase keywords. Typical waste includes other brands you do not want to target, wrong product types, wrong sizes or compatible models you do not fit, and "free" or "used" searches. This step alone often gives the fastest improvement without hurting sales, because it removes spend that was never going to convert.
2. Structure campaigns so you can control them
- Separate research from performance. Use automatic and broad-match campaigns to discover terms, then move proven converting terms into exact-match campaigns with their own bids and budgets.
- Negate harvested terms in the discovery campaigns so the same search is not bid on twice.
- Group by margin. Products with very different margins should not share one campaign and one target.
- Branded vs non-branded. Keep searches for your own brand in their own campaign. They usually have a low ACoS and can make a weak non-branded campaign look better than it is.
3. Adjust bids with a rule, not by feel
For keywords with enough data, a simple approach is: new bid = current bid × (target ACoS ÷ actual ACoS), applied in small steps. Change bids once or twice a week, not every day, and wait for data before judging. Also review placement performance (top of search, rest of search, product pages) and use placement bid adjustments only where the numbers support it. Amazon's bidding strategies (dynamic down only, up and down, fixed) change how aggressively your bids move; if ACoS is the priority, dynamic down only is usually the more conservative choice.
4. Fix the listing, not just the ads
ACoS is also a conversion metric. If shoppers click but do not buy, cheaper clicks only hide the problem. Check the basics on your advertised ASINs:
- Main image that reads clearly at thumbnail size, plus images that answer common questions.
- A title and bullets that match the search terms you pay for.
- Competitive price and delivery promise, and a visible coupon or deal where it makes sense.
- Rating and review count relative to the products shown next to you.
- A+ Content (for brand-registered sellers) and no stock-outs on top variations.
A better conversion rate lowers ACoS at the same bid, and it helps organic ranking too.
5. Stop advertising what should not be advertised
Pause or limit ads on SKUs with very thin margin, low stock, weak ratings, or poor conversion history. Put budget behind the products that convert, then use them to support the rest of the catalog, for example through Sponsored Brands for brand-registered sellers.
6. Watch TACoS while you optimize
If ACoS falls but total sales drop sharply, you may have cut spend that was driving organic ranking. Track TACoS and organic sales weekly. The goal is a healthy business, not the lowest possible ACoS.
Tip: Change one thing at a time and write it down with the date. When results move, you will know why.
A weekly checklist
- Review the search term report and add negatives.
- Move converting search terms into exact-match campaigns.
- Adjust bids on keywords with enough clicks, toward target ACoS.
- Check placement performance and budgets that run out early.
- Check stock, price, ratings and listing issues on advertised ASINs.
- Record ACoS, TACoS, total sales and organic sales.
How Atronia Innovations helps
Our team has managed more than $10M in ad spend, and we work to each client's break-even, not a generic target. Channel Takeover includes full ad management; see pricing or ask for an account review. Planning Q4 on Amazon? Read our note on Amazon's new AI seller tools.
