Advertising
TACoS
Total Advertising Cost of Sales: ad spend divided by total net revenue, not just ad-attributed sales.
Formula
TACoS measures advertising against the whole business rather than against the sales the ads claim credit for. For margin purposes it is the honest number, because a P&L does not care which orders were attributed to which campaign.
TACoS is a revenue ratio. It contains no cost of goods, no Amazon fees and no returns, so it has no break-even on its own. An 18 percent TACoS is comfortable on a product with a 60 percent product margin and a loss on one with 22 percent. To know whether advertising is affordable, compare it to the product's margin, which is what Safe ACoS does.
Related terms
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