Search for a good Sponsored Products ACoS and you will find numbers. Some sites quote averages, some quote ranges by category, and some quote a single figure as if it applied to everyone. None of them know your margin, and margin is what decides whether an ACoS makes or loses money.
This guide builds an ACoS target from the ground up: the break-even point, the adjustment for product stage, and the different targets that different campaigns should carry. It ends with when to change targets, and when to leave them alone.
Start at break-even
Your break-even ACoS is your margin before ad spend, as a share of the selling price. Take the price, subtract product cost, Amazon referral fees, fulfillment fees and any other per-unit cost, and divide what remains by the price.
An illustrative example: Parkway Home sells a product at 50. Product cost is 15, referral and fulfillment fees come to 14, leaving 21. The break-even ACoS is 42 percent. Any ad sale at an ACoS below 42 percent makes money on that unit. Above it, the unit loses money.
Work this out per product, or at least per product group with similar margins. A single account-wide target hides products that are losing money behind products that are not. What a good ACoS is covers the calculation in more depth.
Set the target by product stage
Break-even is the ceiling for profit. The target depends on what the product needs right now.
Launch. New products need sales velocity and reviews to rank. Running above break-even for a planned period can be a sound investment, as long as there is an end date and a reason. Sponsored Products for new listings covers how to run that phase.
Growth. Products gaining rank usually run near break-even, trading short-term profit for share.
Mature. Established products with steady rank should usually run well below break-even, since the goal is profit, and organic sales are carrying more of the load.
Defend or wind down. Products near the end of their life, or with low stock, run tight targets or minimal spend.
Different campaigns, different targets
Within one product, campaigns do different jobs, and holding them all to the same ACoS distorts decisions.
Brand defense campaigns on your own brand terms usually convert well and run at a low ACoS. Treating that as the standard for everything else makes other campaigns look worse than they are.
Exact match campaigns on proven keywords should run close to the product's target. They are where you have the most control.
Discovery campaigns, auto and broad match, find new search terms and typically run at a higher ACoS. Their value includes the terms you harvest from them into exact match.
Competitor targeting often runs higher still, since shoppers there are considering another product.
The product target applies to the blend. If discovery runs above it and brand runs below it, the overall number can still land where you want. Campaign structure shows how to separate these jobs cleanly.
Check targets against TACoS
ACoS only measures ad sales. A product can hit its ACoS target while total sales stagnate, or miss it while organic sales grow because of the ads. Track TACoS, ad spend divided by total sales, next to ACoS. If ACoS is on target and TACoS is falling, the ads are helping the whole product. If ACoS is on target and TACoS is rising with flat total sales, the ads may be buying sales you would have made anyway. TACoS targets by stage covers this pairing.
Turning targets into bids
A target only helps if bids follow it. For each target with enough clicks to judge, compare its ACoS to the target. Well above: lower the bid. Well below with room to grow: raise it. Close: leave it. Make modest changes and give each one time to show its effect before adjusting again. Reducing ACoS covers the other levers when bids alone are not enough.
A worked example across campaigns
Back to the illustrative Parkway Home product with a break-even ACoS of 42 percent. It is a mature product, so the owner sets a product target of 30 percent to keep a healthy profit. Brand defense runs at around 12 percent, exact match on proven keywords near 28, and discovery around 45. Because exact match carries most of the spend, the blend lands close to 30 percent.
If discovery spend grows until it pulls the blend above target, the fix is to rebalance budgets between campaigns, not to force discovery down to 30 percent and lose the search terms it finds.
When to change the target
Change targets when the inputs change: a price change, a cost change, new fees, a move from launch to growth, a shift in what the business needs from the product. Review them every quarter and before major sale events, where higher conversion can support a different target for a short period.
Do not change targets because a week's results missed them. That turns the target into a description of whatever happened, which removes its value as a guide.
Frequently asked questions
What is a good ACoS for Sponsored Products?
One below your break-even ACoS, which is your margin before ad spend as a share of the price, unless you are deliberately investing in a launch. Because margins differ so much between products, a good ACoS for one product can be a losing one for another.
Should every Sponsored Products campaign have the same ACoS target?
No. Brand defense campaigns usually run well below the product target, discovery campaigns above it, and exact match campaigns on proven keywords near it. What matters is that the blend across campaigns lands where the product needs to be.
How often should I change my ACoS targets?
When something underneath them changes: price, product cost, fees, the product's stage, or your goals for it. Review them at least quarterly and before major sale events. Changing targets week to week in response to results defeats the purpose of having them.
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