This is done by deducting all per-unit costs associated with getting the product made, listed and shipped from the sale price. For example, if you’re selling a cat carrier for $100 and these costs come to $75, you’ll have a profit margin of 25 percent.

Our ACoS calculator computes your break-even ACoS in seconds once you know what is your profit per sale. Simply take a look at your current advertising cost per sale to see whether it exceeds this percentage. If it does, you’re losing money on every sale, which is alarming. Adjusting your ad spend to ensure you’re making some profit creates this break-even point.

Poorly optimized listings can also negatively impact your sales and conversion rate. A well-optimized product listing can help you obtain a significant increase in traffic and boost sales. We can’t stress this enough – Amazon product optimization is the first chapter in your seller to super seller story.

Our easy-to-use ACoS calculator generates your target ACoS once you enter the relevant data points. Target ACoS helps you figure out whether you can remain profitable if the sponsored ad campaign and listing remain active. The key here is identifying your target profit per unit sold after deducting the ad spend. Just how much is left, and is it enough? If not, it’s time to make optimize your campaign to ensure your business meets the target profit. 

RoAS or Return on Advertising Spend gauges the effectiveness of your PPC campaigns. RoAS is what you want to raise while lowering your Advertising Cost of Spend (ACoS). This is how you’ll make money from every unit sold.

Bidding on the right keywords for less, encouraging more positive reviews to attract new shoppers, making campaign tweaks based on perceived target audience trends can help reduce your ACoS. However, optimizations should be handled with care. Even seasoned Amazon advertising veterans make as customer preferences continue to evolve. Doing things solo, especially when managing multiple campaigns, can be a nightmare in this sense. It also heightens the risk as you may end up applying guesswork and experimenting. 

Your best bet is to use an automated platform that handles all of this carefully, making informed tweaks by using AI to analyze your campaign, listing, and target audience data. Platforms like Trellis offer huge benefits including, campaign automation, full-funnel targeting, composite ad plans, brand and shelf analytics, and built-in video advertising features. These features provide valuable performance insights, substantial cost savings, and the ability to rank higher while converting the right customers. The result? A boost in effective demand that drives profitable growth.