Definitions
- ACoS = ad spend ÷ ad sales × 100 (lower is better).
- ROAS = ad sales ÷ ad spend (higher is better).
- TACoS = ad spend ÷ total sales × 100 — includes organic sales.
They are two views of the same thing: ROAS = 100 ÷ ACoS. A 25% ACoS is a ROAS of 4.
Your break-even point
Your break-even ACoS equals your profit margin before advertising. If a $40 product leaves $10 after product cost, fees and shipping, break-even ACoS is 25% and break-even ROAS is 4.
Run the numbers in the Break-Even ROAS Calculator, then set a target a few points below break-even to keep a profit.
When running above break-even can make sense
- Launching a new product to build reviews and ranking — for a limited time and budget.
- When TACoS is falling, meaning ads are lifting organic sales too.
- For products with strong repeat purchases, where LTV justifies a higher acquisition cost.
Quick checklist
- Know your break-even ACoS for every advertised product.
- Track TACoS monthly, not just ACoS.
- Cut or fix keywords that spend without converting.