A healthy ACoS on a product that loses money
The advertising console shows an ACoS that looks fine on your bestselling kettle. The campaign seems to be working. Then your accountant points out that the product line barely broke even last quarter. Once you take off the landed cost from the factory, freight, duty, FBA fees, referral fees, returns and the ad spend itself, there is almost nothing left on each sale.
Meanwhile another ASIN with a scary-looking ACoS is actually one of your most profitable, because its margin is wide and its ads pull in organic sales that the ACoS figure does not count.
Nobody made a mistake. The numbers simply sit in different places, and ACoS is the only one that is easy to see.
Why the real picture is hard to get
Amazon Ads reports spend and attributed sales per campaign, ad group and advertised product. Seller Central reports total sales, fees and refunds per SKU. Your landed cost lives in a spreadsheet or your accounting system. None of them know about the others.
- Campaigns often contain several ASINs, so spend has to be split correctly.
- Attributed sales include halo sales of other products, which confuses per-ASIN figures.
- Fees vary by product size tier and category, and change over time.
- Landed cost changes with each shipment from the supplier.
- Organic sales rise and fall with ad spend in ways ACoS does not show.
Joining all of this by hand is possible for a monthly review of a few products. It is not possible daily across a full catalogue, which is when you actually need it, while you are setting bids.
What you are paying for the blind spot
Without profit per ASIN, bids are set against ACoS targets that may be too loose for thin-margin products and too tight for wide-margin ones. Budget flows to the products that look efficient rather than the ones that make money. Launches are judged too early or too late. And when margins fall, it takes weeks of analysis to work out whether ads, fees or cost prices are to blame.
Your advertising agency, if you use one, is in the same position. They are judged on ACoS or ROAS because that is what they can see.
The profit view we build
- Daily pulls of Sponsored Products, Sponsored Brands and Sponsored Display data from the Amazon Ads API, down to advertised product level.
- Daily order, refund and fee data per SKU from the Selling Partner API, so fees are the ones actually charged.
- Landed cost per SKU from your spreadsheet, accounting system or purchase orders, with the date each cost applies from.
- A profit calculation per ASIN per day: sales, minus refunds, fees, landed cost and ad spend, with total sales and ad-attributed sales shown side by side.
- A break-even ACoS for each ASIN, calculated from its own margin, shown next to its actual ACoS so bids can be judged against the right target.
- A weekly summary of ASINs where ad spend rose and profit after ads fell, sent to whoever manages the campaigns.
| Measure | What it tells you |
|---|---|
| ACoS | Ad spend against ad-attributed sales only |
| Break-even ACoS | The most you can spend before a sale loses money |
| Total ACoS (TACoS) | Ad spend against all sales of the ASIN |
| Profit after ads | What is left once cost, fees and ads are paid |
| Organic share | How much of the ASIN's sales came without an ad click |
How you split shared campaign spend and treat halo sales are choices, and we build them as settings you can change once you see the results.
How bid meetings change
Your weekly advertising review starts from profit rather than ACoS. The person managing campaigns sees, for each ASIN, the break-even point and where the current spend sits against it. Products bleeding money are obvious. So are profitable products being starved of budget because their ACoS looked high.
The same view helps outside advertising. When a supplier raises prices, you can see which ASINs drop below break-even at current bids. When Amazon changes a fee, the effect per product is visible within days instead of at quarter end.
If you use an agency, sharing the view with them means they can be judged on the numbers that matter to you.
Signs your ad reporting is missing profit
- Bids are set against one ACoS target for the whole account.
- Landed cost is not linked to your advertising data anywhere.
- You have been surprised by a product that looked fine in ads but lost money.
- Nobody knows the break-even ACoS for each product.
- Your agency reports ACoS and ROAS but not profit.