Break-even ACoS, worked out
The break-even ACoS formula with a worked example, and how the Amazon PPC audit uses your break-even to flag searches that sell at a loss.
Break-even ACoS is the share of a sale you can spend on ads before that sale stops making money.
The formula
Break-even ACoS = profit per sale before ad costs ÷ sale price
Profit before ad costs is the price minus everything else: the product itself, Amazon's referral and fulfilment fees, shipping to Amazon, and returns.
An example
- Sale price: $30
- Product, fees, shipping and returns: $20
- Profit before ads: $10
- Break-even ACoS: $10 ÷ $30 = 33.3%, which is a break-even ROAS of 3.0
Set your target ACoS below break-even so the sale still leaves a profit after ads. The Amazon profit calculator works out break-even ACoS from your price and costs, with no sign-in.
How the audit uses it
Enter your break-even ACoS when you upload a report, and the audit lists the searches that sell at an ACoS more than 5% above it, each with the spend above break-even. With a break-even of 33.3%, a search is flagged above 35%.