TACoS, total advertising cost of sale, is ad spend divided by total sales, ad and organic together. It is the metric that tells you what advertising costs the business as a whole. Sellers often ask what a good TACoS is, and the useful answer is: it depends on what stage the product or brand is in.
A product in its first months should not have the same target as a best seller with years of reviews. This guide covers how to set TACoS targets for four stages, launch, growth, maturity and wind-down, from your own margins, and how to know when a product moves from one to the next. All numbers here are illustrative.
Why one target does not fit all
TACoS rises when ads drive a large share of sales and falls when organic sales take over. Early in a product's life, almost every sale depends on ads, so TACoS is high by nature. Later, rank and reviews carry more of the load and TACoS falls.
Holding a new product to a mature product's target starves it of the visibility it needs to build organic sales. Holding a mature product to a launch target wastes money buying sales it would have had anyway. ACoS versus TACoS covers the metrics themselves.
Start from margin
Before setting any target, know the product's contribution margin before ad spend: price minus fees, cost of goods and shipping. TACoS above that margin means the product loses money overall. Every target below is a share of that margin, which is why the same TACoS can be fine for one product and ruinous for another.
Margin also tells you how much room there is to invest. A product with a thin margin cannot afford a long, expensive launch, and may need a shorter one with tighter limits. A product with a wide margin can carry a heavier launch and still reach profit once organic sales take over.
Stage 1: Launch
Goal: visibility, early sales and reviews.
Target: high, often near or even above margin for a defined period. As an illustration, a product with a healthy margin might accept a TACoS close to that margin for its first two or three months.
Rules: set a time limit and a spend limit in advance. A launch target without an end date becomes a permanent loss. Watch organic rank and review count, not just sales. Those are what the launch spend is buying. The launch guide covers this phase in detail.
Stage 2: Growth
Goal: grow total sales while organic sales take a rising share.
Target: well below margin, with a downward trend. Illustratively, a growth product might aim to bring TACoS down to around half its margin over several months while total sales climb.
Rules: watch the trend more than any single month. If total sales rise and TACoS falls, ads are building organic demand. If TACoS stays flat while sales rise, ads are carrying the growth alone, which is fine for a while but not forever. Scaling PPC profitably covers how to add spend in this stage without losing margin.
Stage 3: Maturity
Goal: defend rank and position at low cost.
Target: low and stable. Illustratively, a mature product with strong organic rank might hold TACoS at a small fraction of its margin, spending mainly on branded terms, top converting keywords and defense against competitors.
Rules: test whether spend is still needed. Lower ad spend in small steps on a mature product and watch total sales. If they hold, the spend was buying sales that organic search would have delivered. If they fall, restore it. Many mature products are overspent because nobody tested this.
Stage 4: Wind-down
Goal: sell through remaining inventory profitably, or harvest a declining product.
Target: as low as possible while sales continue. Advertising here is about clearing stock efficiently, not building rank for the future.
Rules: cut discovery campaigns, keep only the most efficient terms, and stop ads well before inventory runs out so you are not paying for clicks on a product about to go unavailable.
Moving between stages
Products do not move between stages on a calendar. Look for signals.
Launch to growth: the product has a base of reviews, holds a page-one organic position on some core terms, and conversion rate has stabilized.
Growth to maturity: total sales growth slows even as spend rises, and marginal ad spend buys less each step.
Maturity to wind-down: the product is being replaced, discontinued or losing ground for reasons ads cannot fix.
Review each product's stage every quarter. A catalog usually has products in every stage at once, and the account-level TACoS is a blend of all of them. Report it by product or by stage to see what is really happening.
Use bid control to stay on target
A TACoS target only matters if day-to-day bids and budgets respect it. Set campaign-level ACoS or ROAS limits that add up to the stage target, cap budgets for launch products to their planned spend, and step bids down on campaigns that drift above their limit. Small, capped bid steps on trailing performance keep a product on target without the swings of large manual changes. The bid adjustments guide covers how to size the steps.
Frequently asked questions
What is a good TACoS on Amazon?
One that fits your stage and margins. A launching product can run a high TACoS on purpose while it builds rank and reviews. A mature product should run a much lower one, because most of its sales should be organic. Set the target from your own margin and goals, not from a general benchmark.
Should TACoS go down over time?
For a healthy product, usually yes. As organic rank and reviews build, a larger share of sales comes without ads, so TACoS falls even if ad spend holds steady. A TACoS that stays flat or rises over many months suggests ads are not building organic demand.
Is TACoS better than ACoS?
They answer different questions. ACoS measures how efficient ad sales are. TACoS measures how much advertising costs relative to the whole business. Use ACoS to manage campaigns and TACoS to decide how much to spend overall.
Off Hours steps bids on trailing ROAS within a cap you set and enforces budget limits with rules, so each product stays near its stage target. Start a free 14-day trial.