As an Amazon seller, you’ve likely heard of ACOS and TACOS—two of the most talked-about advertising metrics in the FBA world. But while both are essential to understanding your ad performance, they serve very different purposes.
Unfortunately, too many sellers obsess over ACOS and ignore TACOS—missing out on the bigger picture of their business’s health and scalability.
In this blog post, we’ll break down:
✅ What ACOS and TACOS really mean
✅ Why relying only on ACOS is risky
✅ How TACOS gives a better view of growth and profitability
✅ What good ACOS/TACOS benchmarks look like
✅ How to use both metrics together to build a stronger Amazon business
Let’s demystify these two acronyms and put them to work for your business.
🧠 First, Let’s Define ACOS and TACOS
What is ACOS?
ACOS (Advertising Cost of Sale) is the metric Amazon gives you to evaluate the efficiency of your ad campaigns.
Formula:
ACOS = (Ad Spend ÷ Ad Revenue) x 100
Example:
You spent $100 in ads and generated $400 in revenue from those ads.
Your ACOS is:($100 ÷ $400) x 100 = 25%
What it tells you:
How much you’re spending on ads for every dollar of ad-attributed sales.
High ACOS = Less efficient spend
Low ACOS = More efficient spend
What is TACOS?
TACOS (Total Advertising Cost of Sale) measures your advertising spend against your total revenue, not just ad-attributed revenue.
Formula:
TACOS = (Ad Spend ÷ Total Revenue) x 100
Example:
You spent $100 on ads and generated $400 in ad-attributed sales, but $1,000 in total sales (including organic).
Your TACOS is:($100 ÷ $1,000) x 100 = 10%
What it tells you:
How much you’re spending on ads in relation to your entire business performance—not just ads.
🎯 Why You Need to Understand the Difference
At first glance, both metrics look similar.
But here’s the key distinction:
- ACOS tells you how efficient your ads are.
- TACOS tells you how healthy your overall sales ecosystem is.
Obsessing over ACOS is like evaluating your entire restaurant based only on appetizer orders.
You’re ignoring the entrees, drinks, and desserts that might be contributing the most to your revenue.
🚨 Why Relying Solely on ACOS Can Be Dangerous
Many new or even experienced sellers make the mistake of using ACOS as their only metric for advertising performance.
Here’s why that’s risky:
1. It Ignores Organic Growth
If your ads are driving ranking improvements and boosting organic sales, your ACOS may appear high—but your TACOS stays low, and your business is winning.
This is especially true during product launches or keyword ranking campaigns.
2. It Encourages Overly Conservative Bidding
If you’re trying to keep ACOS below a certain threshold (say 20%), you might:
- Miss opportunities to scale
- Cut off keywords that aren’t profitable yet
- Over-optimize and strangle growth
3. It Hides the True Impact of Brand Building
Your ads don’t just drive clicks—they increase brand awareness, boost repeat purchases, and influence shoppers later down the funnel.
ACOS doesn’t account for those “halo effects.”
TACOS does.
📈 Why TACOS Gives You the Bigger Picture
TACOS helps you measure:
- The impact of advertising on your total sales
- Whether your organic sales are growing alongside paid efforts
- How scalable your advertising strategy really is
If your ACOS is stable or increasing slightly, but your TACOS is decreasing—that’s a good sign.
It means you’re generating more organic sales as a result of your ad campaigns, and your business is becoming more efficient over time.
🛠️ When to Use ACOS vs. TACOS
Here’s how to think about both metrics:
| Metric | Use For | What It Measures | When It’s Useful |
|---|---|---|---|
| ACOS | Campaign-level decisions | Ad efficiency | Launching new campaigns, optimizing bids |
| TACOS | Business-wide view | Advertising efficiency across total sales | Measuring growth, profitability, and scalability |
You shouldn’t pick one over the other.
You need both.
Use ACOS to fine-tune your ad campaigns.
Use TACOS to make smarter business decisions.
📊 What’s a Good ACOS and TACOS?
There’s no universal benchmark—it depends on your product, margin, and strategy.
But here are general guidelines:
✅ ACOS Benchmarks
- 10-20% – Excellent for high-margin products
- 20-30% – Average and sustainable for most products
- 30-50% – Often used for aggressive launches or ranking pushes
- 50%+ – Risky unless you’re gaining organic momentum or customer lifetime value (LTV) makes up for it
✅ TACOS Benchmarks
- <10% – Ideal if you have strong organic presence
- 10-15% – Normal for growing brands
- 15-20%+ – Okay for new brands or during aggressive scaling phases
- 20%+ and rising – Potential red flag—organic growth may be stalling
🧠 Tip: The goal should be to decrease TACOS over time, even if ACOS stays the same or increases slightly.
🔍 Real-World Example: Why TACOS > ACOS
Let’s say you’re launching a new supplement:
Month 1:
- Ad Spend: $2,000
- Ad Sales: $4,000
- Total Sales: $4,500
- ACOS: 50%
- TACOS: 44%
That looks rough, right?
But let’s look at Month 3:
Month 3:
- Ad Spend: $2,000
- Ad Sales: $4,500
- Total Sales: $9,000
- ACOS: 44%
- TACOS: 22%
Your ACOS didn’t improve much.
But your TACOS got cut in half. Why?
Because your organic sales doubled.
That’s a win.
🚀 How to Use ACOS and TACOS to Scale Smart
Here’s a strategy framework to grow profitably using both metrics:
1. Launch Phase: Prioritize Growth Over Profit
- Expect higher ACOS (30-50%+)
- Monitor TACOS to make sure total revenue is growing
- Focus on driving ranking and gaining reviews
2. Growth Phase: Track TACOS Weekly
- Aim for consistent or decreasing TACOS
- Stabilize ACOS through bid adjustments
- Expand campaigns for branded and long-tail keywords
3. Scale Phase: Optimize for Profitability
- Maintain low TACOS
- Trim underperforming ad groups
- Push Sponsored Brands, Display, and video for repeat traffic and defense
🧩 Bonus: Advanced Tips for Managing Both Metrics
✅ Automate Your Reporting
Use tools like:
- Helium 10
- Sellerboard
- Perpetua
- Amazon’s Brand Analytics
- Marketplace Valet dashboards
To track both ACOS and TACOS trends over time.
✅ Separate Branded vs. Non-Branded Campaigns
Branded terms often have very low ACOS—but don’t reflect your real advertising efficiency.
Track non-branded ACOS and TACOS separately for a clearer picture of top-of-funnel performance.
✅ Track TACOS by Product
Some products are naturally more ad-reliant.
Track TACOS at the SKU level to spot underperformers, rising stars, or declining ASINs.
✍️ Final Thoughts: ACOS and TACOS—Use Both, Grow Smarter
ACOS is like checking the miles per gallon on your car.
TACOS is like measuring your total cost per mile traveled—including gas, maintenance, and tolls.
Both matter.
But only one tells you how far you’re really getting with your investment.
So don’t fall into the trap of chasing “low ACOS” at all costs.
Instead, build a strategy that prioritizes profitable growth, supported by rising organic sales and decreasing TACOS.
That’s how winning Amazon brands scale sustainably—and win long term.
Want help building a smarter advertising strategy that balances ACOS, TACOS, and total growth?
At Marketplace Valet, we help brands scale profitably on Amazon through intelligent advertising, optimized listings, and full-service marketplace management.
📩 Let’s talk about growing your brand the right way.
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