What’s a Good ACOS for Amazon Ads? (Industry Benchmarks)

When you run ads on the Amazon advertising platform, the burning question is always, what’s a “good” ACOS? Before we get tactical, it’s worth setting the stage. These days, over 60% of sales in the Amazon store actually come from independent sellers, the majority of whom are small or midsize businesses. That means mastering key advertising metrics isn’t just for big brands with huge budgets. If you want to compete and win, it is important for you, too.

Well, first things first: ACOS is more than a KPI you track for reports and check off at the end of the month. Your ACOS (Advertising Cost of Sale) is a real-world indicator of whether you’re building profitable growth or just feeding the Amazon machine. But there’s a nuance that some of you might have missed: ACOS indicators aren't static, nor is “low” always better. ACOS shifts with your goals, category, and stage of business, calling for thoughtful calibration if you want to stay profitable and competitive.

What Is ACOS in Amazon Advertising Services?

Let’s ground this for everyone. ACOS measures the ratio between what you spend on advertising and what you earn back from ad-driven sales. Basically, it’s the clearest lens for e-commerce advertisers seeking efficiency. The formula is simple enough: ad spend divided by attributed sales, multiplied by 100 to express the percentage. If you spend $100 to make $500 in tracked sales, your ACOS is 20%. Too high, and you’re giving away your margins. Too low, and you might not be investing enough in acquisition and growth.

ACOS = (Ad Spend / Attributed Sales) x 100

And how you interpret this depends a lot on your business model. Suppose you’re aggressively launching a product; maybe breaking even (or even running a negative margin for a bit) is part of a deliberate land grab. On the other hand, a mature brand in home goods or electronics needs to keep its ACOS low to hit profit targets, as prices are highly competitive and margins are often razor-thin. Consider ACOS as one arm of a balancing act between margin, volume, and market development.

How Much Do Amazon Ads Cost? Understanding ACOS for Amazon Paid Ads

The era of “cheap clicks” is over across nearly every Amazon category. This year, most brands report that CPCs have climbed again: sometimes quietly, sometimes in big jumps around peak traffic. 

Ad costs are the core of your Amazon advertising strategy, but the driving force is your targeting, keywords, and creative content. Costs will fluctuate.

• In 2025, average CPCs for Sponsored Products on Amazon hover around $0.80–$1.25 in major categories, with spikes even higher in segments like Electronics or Health.
• Brands spend anywhere from several hundred dollars to thousands per month, but efficient brands track their spend as a percentage of product revenue, typically targeting 20–30% of gross sales for ad programs.

Setting Your ACOS Targets Using Amazon Advertising Management Services

Setting your ACOS goals used to be a case of “shoot for under 20% and call it a day.” Now, the only universal advice is that every seller needs to get granular.

Step 1: Know Your Margins

Start by calculating your true margin on each unit. Take the sale price and subtract your COGS, Amazon fees, and shipping.

Step 2: Find Your Break-Even ACOS

Work out the point where you’re neither making nor losing money. Use this formula:

Break-even ACOS = (Selling Price – Total Costs) ÷ Selling Price x 100%

If your campaign ACOS stays below it, you’re profitable.

Step 3: Factor in Growth Goals

Decide what stage you’re in. If you’re launching a new product or aggressively scaling, it’s normal to accept break-even or even negative returns (loss-leader campaigns) in the short run to build visibility.

Step 4: Use Industry Benchmarks

Check against category averages to validate your target ACOS. Benchmarks help you see if your expectations are realistic or way off track.

Step 5: Adjust by Campaign Type

Not all campaigns should have the same ACOS goal:

• Brand protection usually allows for higher ACOS
• Conquesting campaigns (targeting competitor terms) might need more flexibility
• Seasonal promotions can be loss-leaders to capture market share
• Category defense should be aligned tightly with your margins

Step 6: Monitor and Optimize with Tools

Use tools like Xnurta’s reporting dashboards to automatically track results and adjust your ACOS targets as real data rolls in.

ACOS vs. TACOS

ACOS, being tactical, helps you optimize individual Amazon advertising campaigns and test new segments. But TACOS (Total Advertising Cost of Sale) is your strategic, brand-level pulse check. It’s the % of all sales (paid + organic) that you spend on ads. If ACOS continues to fall, but TACOS rises, something is off. 

Where many advertisers stumble is focusing solely on ACOS. TACOS (Total Advertising Cost of Sale) tracks all ads versus your total revenue, highlighting whether your ad spend is “buying new growth” or just moving dollars around.

You should use both: 

• ACOS to manage and optimize individual campaigns.
• TACOS to assess the big picture

Amazon ACOS Optimization Strategies for Better ROI

If you’ve been running Amazon ads system manually for years, it’s time to reframe your reactive approach. 

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Amazon ACOS Optimization Strategies for Better ROI 

• Fine-tune keyword targeting and use negative keywords regularly
• Automate bid management using tools (like Xnurta Copilot), which adjust bids hour by hour, chasing the best ACOS range 
• Optimize creative and copy through frequent A/B testing to increase CTR and reduce cost per conversion.
• Segment campaigns: Set up for each vertical, margin cluster, or lifecycle stage
• Use extensive reporting, as good dashboards expose where you’re overspending or underbidding.

You are expected to detect hidden inefficiencies, including search queries that look promising but never convert or ad groups with “star” SKUs that cover underperforming keywords.

What Is a Good ACOS for Amazon Ads? Analyzing Industry Standards

Let’s break down some benchmark ACOS numbers so you can see where you stand and where you can aim, assuming margins and conversion rates line up.

Beauty & Personal Care

For this space, a typical ACOS runs from 18% to 28%. It’s not unusual for new launches or brands fighting for a larger share to experience higher ACOS for a while, especially if the ultimate goal is to increase lifetime value. What you want to see: campaigns dialed in using segmentation and retargeting, so even if you’re okay with a higher ACOS at first, the numbers improve as loyal customers come back and make repeat purchases.

One eyewear brand using Xnurta saw a 75% increase in orders while dropping its ad spend rate by 60%. They also experienced a massive 162% increase in conversion rates, which demonstrates that effective data and strategic optimization outperform a “spray and pray” approach. Read this case study now.

Electronics

In electronics, ACOS typically falls within a tighter 13–21% band, where every point counts because margins can be narrow and competition is fierce. Top performers don’t just set and forget bids; they’re obsessed with review counts, listing freshness, and conversion signals. Keeping product content sharp, nailing your value proposition, and watching the competitive landscape are all musts. Sometimes, holding ACOS steady is less about driving it as low as possible and more about defending the healthy margins you worked hard to build.
A portable power brand using Xnurta’s DSP strategy racked up 99% sales growth, a 16% ROAS lift, and a wild 55x jump in conversions. Take a look at their success story.

Home & Kitchen

In Home & Kitchen, you’ll typically see ACOS between 15% and 27%, with some brands reaching up to 30% during the gifting spikes in Q4. The highest performers attack campaigns with robust review pipelines, regular listing refreshes, and campaign pacing that tracks with holiday peaks and valleys.

An art supply brand used Xnurta’s AMC audiences and saw sales jump 49%, average transaction value soar 120%, and ROAS pop by 169%. That kind of growth comes from consistently targeting the right data and audiences day in and day out. See how they did it.

Pet Supplies

The pet category is all about repeat buyers. ACOS swings from 20% to 32%; and brands here often accept higher ACOS on first purchase, if the numbers pencil out in the long term with subscriptions or high retention. Leading brands nurture direct relationships with audiences through DSP and AMC-powered targeting, often accepting higher ACOS in the first purchase to capture LTV on repeat orders

Clothing, Shoes & Jewelry

Here, 22% to 38% is the “normal” range, but outlier results (higher or lower) happen during aggressive launches or trend surges. The best promotion teams break up their efforts by collection, season, or trend, treating each as its own little business so top-performing SKUs don’t get diluted in the averages.

For instance, Orolay boosted purchase rate by 13.5% and saw a 7% lift in new-to-brand buyers, along with a 300% improvement in key engagement metrics, after using AMC-powered targeting with Xnurta. Dive into their story.

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No matter which category you’re in, these ACOS ranges give you a real-world checkpoint. Every brand and every product is a bit different, so regularly check your campaign data and compare trends quarter to quarter.

Advanced ACOS Advertising Tips from Amazon Advertising Specialists

Common ACOS Mistakes and How to Avoid Them

If you want to avoid wasted spending and keep your ACOS in a healthy range, be sure to watch out for these routine errors:

• Overbidding: Chasing high-traffic, expensive keywords seems tempting, especially for quick growth. But if these terms aren’t converting, you’re sinking your budget into clicks that never pay off.
• Ignoring Margins: It’s easy to focus only on driving your ACOS down, but if you’re not factoring in your true profit after fees and costs, a “low” ACOS might still mean you’re losing money.
• Poor Segmentation: Bundling several unrelated SKUs under a single campaign hides the winners and muddies real margin tracking. When products with vastly different costs compete for the same ad dollars, you lose clarity on what’s actually driving the business.
• Neglecting Negative Keywords: If you’re not pruning out search terms that never convert, you’re wasting money on irrelevant shopper traffic.
• Not Using Reports Frequently: Infrequent reviews mean you miss optimization windows, and a month of small mistakes can snowball into a quarter of lost profit.

How Brands Achieve Efficient ACOS with Xnurta

Take Upexi and their VitaMedica brand. They’re no strangers to Amazon, but their past ad management system held them back. They found themselves pouring hours into manually monitoring campaigns just to watch ACOS grow. When they switched to Xnurta, things changed fast.

The Xnurta’s Sponsored Ads AI Copilot became the reason of their turnaround. Upexi used automated bid and budget dayparting to spend smarter. For their hero keywords, Lock Ad Placement secured premium, above-the-fold slots so they didn’t have to overbid for visibility. With Managed Groups, they could finally unite campaigns by goal and let Xnurta’s AI follow the real performance.

• ACOS fell by 7.5 percent across key campaigns, with no sacrifice in sales.
• Profitability in AI-managed campaigns jumped 26 percent.
• Core product lines lifted sales by more than 12 percent, even as overall spend only ticked up slightly.

You can read the full Upexi case study here.

Let’s look at another success. A well-known LED lights brand found itself losing momentum, with ACOS flatlining and organic rankings slipping. Their campaigns needed a jumpstart. With Xnurta, they unlocked the benefits of AI: first by setting new, fresh ACoS targets that matched their latest business goals, and then by using Xnurta’s Product Center to spot winning competitor ASINs and underperformers in their mix.

Xnurta’s direct API pull from Amazon Marketing Stream gave their team true, real-time feedback. When the data showed that mornings didn’t convert well, they dialed back budgets, focusing spending on the hours buyers actually shopped. The AI’s keyword recommendations were applied instantly, raising bids where there was a clear payoff and cutting them where spend was just vanishing into clicks.

• Orders and sales shot up by nearly 20 percent, all on just a 7 percent higher ad spend.
• ACOS dropped a clean 10 percent while conversion rates improved by 9 percent.
• Automation saved the ops team hundreds of hours, letting them play offense with new growth ideas.

If you want to dive into the details, the full story is available here.

FAQ

What should my target ACOS be for Amazon Ads?

Your ideal ACOS depends on the margins of your products, your overall business strategy, and your current stage in the product lifecycle. Start by calculating your break-even ACOS: that’s your profit margin after all costs (product, shipping, Amazon fees, FBA, returns). A smart target ACOS is a few percentage points lower, allowing room for profit and flexibility during market shifts. If you're launching a new product, you might accept a higher ACOS for a short period to gain traction, reviews, or organic rank, but for core products you want an ACOS that leaves a healthy profit every sale.

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How does ad type affect ACOS ranges?

ACOS varies depending on which Amazon ad format you use, because each drives traffic and sales differently. Sponsored Products, focused on shoppers with direct buying intent, typically yield the lowest ACOS. Sponsored Brands and Sponsored Display usually show a slightly higher ACOS because they serve multiple purposes: brand awareness, cross-selling, and sometimes re-targeting. Display and DSP ads can drive new-to-brand or upper-funnel value but may produce ACOS numbers that look “expensive” if you only compare them to bottom-funnel campaigns.

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How do market trends impact campaign ACOS?

Market trends push and pull campaign ACOS all year long. For example, during major retail events (Prime Day, BFCM, or back-to-school periods), increased competition drives up CPCs, and if conversions don’t keep pace, ACOS rises. New competitors, supply chain hiccups, or shifts in consumer habits can all force you to re-examine targets mid-campaign. The best Amazon advertisers proactively watch category cost shifts, competitor bid pressure, and seasonality. 

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Should I always aim for the lowest possible ACOS?

No. It’s tempting to chase the lowest ACOS possible, but that mindset can actually limit your growth. If you’re launching new SKUs, investing in brand awareness, or moving into a competitive category, you may need to “buy” visibility and sales velocity at a higher ACOS. As your product matures and reviews stack up, you can optimize for efficiency and gradually lower your ACOS target. Always balance short-term profitability with long-term growth; sometimes, a controlled period of higher ACOS is the price for future organic ranking or loyal, returning buyers.

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How does ACOS affect my overall profitability?

ACOS is one of the most direct levers you can pull to manage (or sabotage) profitability on Amazon. A high ACOS means more of your revenue is eaten by ad spend, risking razor-thin or even negative margins if you aren’t careful. However, an ultra-low ACOS can signal you’re missing out on new customers or volume. The healthiest brands use ACOS as a “signal light”—noticing when it’s rising or falling for the right reasons, and checking against other key metrics like TACOS (which includes organic sales), overall profit per order, and lifetime customer value

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What’s the optimal ACOS for Beauty & Personal Care brands?

In Beauty & Personal Care, the typical ACOS sits between 18% and 28%. These brands often accept slightly higher ACOS when driving new customer acquisition or promoting launches because they rely heavily on repeat purchases. The best-performing brands segment campaigns for repeat buyers (where ACOS can be lower) vs. prospecting. 

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What is the industry average ACOS for Home & Kitchen brands on Amazon?

For Home & Kitchen, industry ACOS typically lands between 19% and 27%, with some fluctuation based on the season or product type. Q4 and summer (gifting and graduation spikes) can push ACOS higher. High SKU counts and fierce competition require strong segmentation, robust review strategies, and careful pacing. 

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When should pet supply brands accept higher ACOS for brand-building?

Pet supply brands can rationally accept a higher ACOS in key moments, such as launching new subscription products, introducing innovative SKUs, or expanding into new Amazon audiences. This is especially worthwhile if you’re targeting high-lifetime-value segments, such as those with recurring orders through Subscribe & Save or products with strong repeat purchase rates. 

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What is a realistic ACOS benchmark for apparel, shoes, and jewelry categories?

In Apparel, Shoes, and Jewelry, a realistic ACOS falls between 22% and 38%, with higher variation than other verticals. Fast turnover of collections, shifting trends, and visually driven shopping mean that even top brands often operate at higher ACOS than the site average.