🧭 Overview
Total Advertising Cost of Sales (TACoS) is one of the most important long-term profitability metrics for Amazon sellers. Lowering TACoS the wrong way can hurt visibility and revenue, while doing it correctly improves margins without sacrificing growth.
In this guide, you’ll learn a practical, step-by-step framework to reduce TACoS sustainably while protecting — and often increasing — total sales.
👥 Who This Is For
This guide is designed for:
Beginner sellers who:
Are running Amazon Ads but feel unsure how to judge performance
Want to improve profitability without turning ads off
Intermediate sellers who:
See rising ad spend but flat sales
Want better control over organic vs. paid performance
Advanced sellers who:
Are scaling ad budgets and need efficiency at higher spend levels
Want to improve long-term profitability, not just short-term ROAS
📘 Key Concepts You Need to Know
Before optimizing TACoS, it’s important to understand how it differs from other Amazon ad metrics.
TACoS (Total Advertising Cost of Sales)
Ad Spend ÷ Total Revenue (organic + ad-driven).
Measures how dependent your business is on advertising.ACoS (Advertising Cost of Sales)
Ad Spend ÷ Ad-attributed Revenue only.
Shows campaign efficiency but ignores organic impact.Organic Sales Lift
Additional non-ad sales generated indirectly by ads through improved ranking and visibility.Keyword Rank
Your product’s position in Amazon search results for a specific keyword.
🛠️ Step-by-Step Framework to Lower TACoS Safely
1️⃣ Establish a True TACoS Baseline
Before making changes, confirm your real starting point.
Pull total revenue and total ad spend for the same 30–60 day period
Calculate current TACoS
Segment data by:
Brand vs. non-brand keywords
Core ASINs vs. long-tail ASINs
⚠️ Common Pitfall:
Using a 7-day window leads to misleading conclusions due to attribution lag.
💡 Pro Tip:
Always analyze at least 30 days of data.
2️⃣ Identify Keywords That No Longer Need Heavy Ad Support
As products mature, some keywords maintain rank organically.
Actions to take:
Identify keywords where:
Organic rank is consistently top 5–10
Ads generate sales but do not increase total volume
Gradually reduce bids instead of pausing campaigns
💡 Pro Tip:
Lower bids by 10–20% at a time, then observe results for 7–10 days.
3️⃣ Eliminate Spend That Doesn’t Contribute to Total Revenue
Not all ad-driven sales are incremental.
Look for:
High ACoS keywords that:
Do not improve organic rank
Do not correlate with organic sales growth
Search terms with clicks but no conversions
Actions:
Add negative keywords aggressively
Pause terms with repeated spend and zero sales
⚠️ Common Pitfall:
Cutting campaigns solely because ACoS is high, without evaluating organic impact.
4️⃣ Improve Listing Conversion Before Cutting Ads
Lower TACoS is easier when conversion rates improve.
Focus on:
Main image clarity and compliance
Keyword-relevant, readable titles
Bullet points that answer buyer objections
A+ Content that reinforces differentiation
💡 Pro Tip:
A 0.5–1% increase in conversion rate can significantly reduce TACoS at scale.
5️⃣ Shift Spend Toward Keywords That Drive Rank Growth
Not all keywords deserve equal investment.
Prioritize:
Keywords with strong conversion rates
Keywords closely aligned with your core product
Terms where rank improves when ads are active
Reduce spend on:
Broad or loosely related terms
Keywords that generate sales but no rank movement
💡 Pro Tip:
Track organic rank changes alongside ad spend, not in isolation.
6️⃣ Monitor TACoS Trends — Not Daily Swings
TACoS is a trend metric, not a daily optimization lever.
Best practices:
Review weekly or biweekly
Compare month-over-month performance
Evaluate alongside:
Organic sales share
Keyword rank stability
⚠️ Common Pitfall:
Making aggressive changes based on short-term fluctuations.
🌍 Real-World Seller Scenarios
🧪 Scenario 1: Mid-Stage Private Label Seller
Seller Type: 2-year private label brand
Problem: TACoS stuck at 28% with flat sales
Action Taken:
Reduced bids on top-ranking keywords
Added negatives to low-converting search terms
Result:
TACoS dropped to 21%
Total revenue remained stable
🚀 Scenario 2: Advanced Brand Scaling Aggressively
Seller Type: 7-figure brand
Problem: Rapid spend growth with declining margins
Action Taken:
Shifted budget to rank-driving keywords
Improved listing conversion before reducing ads
Result:
TACoS reduced by 6 points
Organic sales share increased
⚠️ Common Mistakes to Avoid
❌ Turning Off Ads to “Fix” TACoS
Why it happens: Focus on short-term metrics
Do this instead: Reduce dependency gradually while protecting rank
❌ Optimizing Only for ACoS
Why it happens: ACoS is easier to see in Amazon Ads
Do this instead: Measure total revenue impact
❌ Ignoring Conversion Rate Issues
Why it happens: Sellers blame ads instead of listings
Do this instead: Fix listing fundamentals first
📈 Expected Results
When applied correctly, sellers typically see:
Lower TACoS without sudden sales drops
Increased organic sales share
More predictable ad performance
Improved long-term profitability
Better scalability during promotions and peak seasons
❓ FAQs
How low should my TACoS be?
There’s no universal benchmark. It depends on margins, category competition, and growth stage.
Is rising TACoS always bad?
No. TACoS can rise during launches or expansion if total revenue grows.
Should I pause keywords with high ACoS?
Only after confirming they don’t support organic rank or total sales.
How long does it take to see results?
Most sellers see improvements within 30–60 days.
To make implementation easier, we’ve included a checklist you can use during your TACoS review.