Amazon TACoS Calculator

Keeping track of ACoS is extremely important for businesses of all kinds. You can't be running ads without checking how they perform.

Benefits of calculating ACoS are:

• Improved budget allocation for your Amazon ads
• Better decisions being made for your e-commerce business
• Increased Amazon advertising efficiencyAs already explained, TACoS is a KPI you must track. But, if you're wondering why, here are some of the reasons:
• It provides insights into your organic health: You might think that ads don't impact your organic sales, but you would be wrong. That's why you need to track TACoS. Let's say you've spent $1,000 on ads and your TACoS stays low (or even better, it decreases); that means you're getting more organic sales as a result of your advertising campaigns. This is often referred to as "free sales".
• It can improve your cost-efficiency with Amazon ads: If you increase your ad spend and don't see an increase in total revenue (ads + organic), your product may have already reached its maximum potential.
• It can show how much you are dependant on ads: If your ACoS is great but TACoS is creeping up, that's bad news because your business is then relying on ads to generate sales. Let's face it: if you are not seeing organic revenue, you might have a pretty weak business model.
• It can help you "determine" what phase your product is in: If you are in the product launch phase, your TACoS will likely be high (over 40%). But if your TACoS is below 15%, it might indicate that your product has entered the mature phase.
• It gives a clearer picture of your net profit margin: If your business targets a 20% net profit margin and your TACoS is 25%, you know you are losing money regardless of your ACoS.

Let's say you own an e-commerce bookstore and decide to spend $2,500 in January on advertising (not only Amazon, but other channells as well: Meta, Google, etc).

The total value of books sold in Jan is $20,000, including sales from paid ads, email newsletter, organic search, social media, etc.

You would then do a simple calculation:

$2,500/$20,000 x 100 = 12.5 %

So, in this specific example, 12.5% of your total revenue is going back into advertising.

Let's bring ACoS into the equation. If you generated $5,000 in sales from ads only, your ACoS would be:

$2,500/$5,000 x 100 = 50%

Spending 50% of the sale price on ads looks terrible, which is why you should ALWAYS measure TACoS as well!

The TACoS formula is:

TACoS = (Total Ad Spend/Total Revenue (Organic + Ads) x 100

Easy, right? But, you don't have to calculate TACoS manually. It's 2026! That's why we built this TACoS calculator in the first place. Just input your total ad spend and total revenue and our calculator will do the math for you.

It depends on your business and the phase your product is in. Overall, anything below 15% is considered a good benchmark.

If you are launching a product, you should not expect TACoS to be that low; it can range anywhere between 20-50%, or even higher. The product launch phase should not typically last longer than 6 months. After that, TACoS should drop below 20%, and within 12 months from the launch, it should drop below 15%.

You should calculate TACoS weekly as it is short enough to catch negative trends before it destroys your whole month.

TACoS should not be calculated daily because it is extremely volatile; one bad ad day or one bulk order can distort the numbers. It might make sense to calculate TACoS daily only during a product launch, Black Friday or other major events. But use it with caution!

Even if you calculate TACoS daily or weekly, you still need to do it monthly. Monthly TACoS is your most important view for profitability. Remember that Amazon sales numbers can have up to a 14-day attribution delay, so looking at a full month data can give you the most accurate result.

It can also be extremely helpful to compare this month's TACoS with the same month last year and then analyze the numbers accordingly. If your TACoS from Jan-25 was 10% and from Jan-26 is 15%, you need to critically evaluate why? Did a new competitor show up or did cost per click increased?