Why is my Amazon ACOS so high?

High ACOS typically stems from: (1) Poor keyword targeting, bidding on irrelevant terms, (2) Low conversion rates on your listing, (3) Overbidding on competitive keywords, (4) Not using negative keywords to filter waste, or (5) Weak product differentiation. Start by checking your search term report for wasted spend.

How quickly can I lower my ACOS?

You can see initial improvements within 1-2 weeks by adding negative keywords and adjusting obvious overbids. However, sustainable ACOS improvements typically take 4-8 weeks as you gather enough data to make informed decisions. Avoid making too many changes at once, it makes it hard to know what worked.

Should I pause keywords with high ACOS?

Not immediately. First, try reducing bids by 20-30%. Some keywords are profitable at lower bid levels. Also check if those keywords drive organic sales, high ACOS keywords sometimes boost overall TaCoS. Only pause keywords that have significant spend with zero conversions over 2+ weeks.

What's the difference between ACOS and TaCoS?

ACOS measures ad spend vs. ad-attributed sales only. TaCoS (Total Advertising Cost of Sales) measures ad spend vs. your total revenue including organic sales. TaCoS is often more important because ads drive organic ranking improvements that don't show up in ACOS calculations.

How to Reduce Amazon ACOS: 7 Proven Strategies for 2025

Lower your ACOS without sacrificing sales, and discover why TaCoS might matter more than you think.

Published: December 18, 2025

Quick stat: The average Amazon ACOS across all categories is 30-35%. But "average" isn't the goal, profitable is. Here's how to get there.

First: What Is ACOS (And What's a Good Target)?

ACOS (Advertising Cost of Sales) measures how much you spend on ads for every dollar of attributed ad sales. The formula:

ACOS = (Ad Spend ÷ Ad Revenue) × 100

A 25% ACOS means you spend $0.25 on ads for every $1.00 in ad-attributed sales. But your "good" target depends on your margins. If your profit margin is 30%, anything under 30% ACOS is profitable.

What's your break-even ACOS?

Know your exact profitability threshold before optimizing. Enter your price and costs to get your target range in 30 seconds.

Calculate your break-even ACOS

7 Strategies to Lower Your Amazon ACOS

1. Harvest Negative Keywords Aggressively

Your search term reports are a goldmine. Every irrelevant term that's eating your budget should become a negative keyword. Focus on terms with high spend but zero conversions, these are the biggest wasters.

Pro tip: Review search terms weekly, not monthly. Waste compounds quickly.

2. Segment Your Campaigns by Match Type

Don't mix exact, phrase, and broad match keywords in the same campaign. Each match type behaves differently and needs different bid strategies. Exact match keywords typically deserve higher bids, they're more targeted.

3. Reduce Bids on Low-Converting Keywords (Don't Just Pause)

Before pausing a keyword entirely, try reducing its bid by 20-30%. Some keywords are profitable at the right bid, they just need adjustment, not elimination. Pausing too aggressively can hurt discoverability.

4. Optimize Your Product Listings First

High ACOS is often a conversion problem, not an ad problem. If your listing doesn't convert, no amount of bid optimization will help. Improve your images, bullets, A+ content, and reviews before throwing more money at ads.

5. Use Dayparting Strategically

Not all hours are created equal. Some sellers see significantly better conversion rates during certain times of day. Consider increasing bids during high-converting hours and reducing them during dead zones.

6. Target Long-Tail Keywords

High-volume head keywords are expensive and competitive. Long-tail keywords ("organic bamboo cutting board with juice groove") have lower CPCs and often higher conversion rates because they match buyer intent more precisely.

7. Let AI Handle the Math (But Stay in Control)

Manual bid optimization doesn't scale. AI tools can analyze thousands of keywords and adjust bids in real-time based on performance data. The key is choosing a tool that explains its decisions, so you can verify the logic and catch mistakes.

Why Smart Sellers Focus on TaCoS, Not Just ACOS

Here's what most sellers miss: ACOS only measures ad-attributed sales. But your ads also drive organic sales that don't get attributed. When you obsessively cut ACOS, you might be killing campaigns that are actually driving total revenue.

TaCoS (Total Advertising Cost of Sales) measures ad spend against total revenue, organic + paid. This gives you the complete picture of advertising's impact on your business.

TaCoS = (Ad Spend ÷ Total Revenue) × 100

Example: Why ACOS Can Lie

Campaign A (ACOS: 40%)

Ad Spend: $1,000
Ad Revenue: $2,500
Organic Revenue: $5,000
TaCoS: 13.3%

Campaign B (ACOS: 20%)

Ad Spend: $1,000
Ad Revenue: $5,000
Organic Revenue: $1,000
TaCoS: 16.7%

Campaign A has double the ACOS but is actually more efficient for your total business.

Automate ACOS Optimization with Transparent AI

Prism applies all these strategies automatically, but explains every decision in plain English. You'll know exactly why a bid is increasing, which keywords need attention, and how changes impact your TaCoS.

Most importantly, you stay in control. Approve changes before they happen, or enable automation only for optimizations you trust. It's AI that works with you, not instead of you.

Frequently Asked Questions

A 'good' ACOS depends on your profit margins. If your profit margin is 30%, any ACOS below 30% is profitable. The average ACOS across Amazon is 30-35%, but top performers often achieve 15-20% on established products. New product launches may run higher ACOS intentionally to gain ranking.

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