PPC
How to lower ACOS without losing sales
Afrasiab Khan
Co-Founder & CEO, Chartered Accountant · · 7 min
A practical playbook for cutting Amazon advertising cost of sale while protecting the revenue your ads drive.
Calculate your ACOS, TACOS and break-even target →Start with the right target
ACOS on its own is a misleading goal. A low ACOS can mean you are under-investing in growth; a high one can be fine during a launch. Set a target from your margin: your break-even ACOS equals your profit margin before ad spend. Manage to that number, and to TACOS (ad spend divided by total sales), which tells you whether ads are lifting organic sales too.
Cut waste before you cut bids
Most wasted spend sits in search terms that never convert. Review your search term report every week and act on it.
- Add negative exact keywords for terms with clicks but no orders after a meaningful sample
- Move proven converting search terms into exact-match campaigns
- Separate branded, competitor and generic keywords so each gets its own budget and target
- Pause placements and targets that consistently miss your break-even ACOS
Fix conversion, not just ads
Ads amplify your listing. If the main image, price, reviews or A+ content are weak, every click costs more. A higher conversion rate lowers ACOS on its own, without touching a single bid.
Use bids surgically
Lower bids gradually on keywords above target rather than cutting across the board, and raise them on efficient terms that are budget-capped. Use placement modifiers where top-of-search converts better. Review the effect over at least one to two weeks before changing again.
When to bring in help
If you are spending hours a week in the console and ACOS still drifts up, an agency that manages to profit can usually find savings quickly. Extreme Branding (EB)'s free audit shows where your spend is leaking.