Treating break-even as the target
At break-even ACoS, ad-attributed sales make no profit at all. Bid toward a target ACoS below it, set by the margin you want to keep.
Break-even ACoS calculator
Break-even ACoS is the highest ACoS a product can run before each ad-attributed sale loses money. It equals the product’s profit per unit before advertising as a percentage of its selling price: price minus landed cost of goods, Amazon’s referral fee, the FBA fulfillment fee and any other per-unit costs, divided by price, times 100. Below that ACoS, ads make money on the sales they drive.
Calculate break-even ACoS
- Break-even ACoS
- 40%
- Each ad-attributed sale makes money while ACoS stays below 40%.
- Target ACoS
- 25%
- Keep ACoS at or below 25% to keep a 15% profit margin on ad-attributed sales.
- Profit before ads
- $10.00
- Per unit, before any ad spend.
- Referral fee
- $3.75
- Per unit, at the rate entered.
Use one currency for every amount. The calculation runs in your browser, and nothing you enter is stored or sent.
Break-even ACoS formula
Break-even ACoS is the margin a product earns before advertising. Spend exactly that share of a sale on ads and the sale makes no profit and no loss. Subtract the margin you want to keep and you have a target ACoS.
Profit before ads = price − COGS − referral fee − fulfillment fee − other costs
Break-even ACoS = profit before ads ÷ price × 100
Target ACoS = break-even ACoS − target profit margin
Worked example
A product sells for $25.00. It costs $6.00 landed, pays a 15% referral fee and a $4.25 FBA fulfillment fee, and carries $1.00 of other per-unit costs. The seller wants to keep a 15% profit margin on ad-attributed sales.
| Step | Calculation | Result |
|---|---|---|
| Referral fee | $25.00 × 15% | $3.75 |
| Profit before ads | $25.00 − $6.00 − $3.75 − $4.25 − $1.00 | $10.00 |
| Break-even ACoS | $10.00 ÷ $25.00 × 100 | 40% |
| Target ACoS | 40% − 15% | 25% |
Any ACoS below 40% makes money on ad-attributed sales. To keep 15% of each of those sales as profit, campaigns for this product need an ACoS of 25% or lower. The subtraction works because ACoS and margin are both percentages of the same selling price.
What to include
The result is only as accurate as the costs you enter. Use per-unit figures, in one currency.
| Selling price | The price customers actually pay per unit, after coupons and promotions, excluding sales tax or VAT. In marketplaces where listed prices include VAT, such as the UK and EU, remove the VAT first. |
|---|---|
| Landed cost of goods | What one unit costs you once it is ready to send to Amazon: product cost plus freight, duties, inspection and prep. |
| Referral fee | A percentage of the selling price. Most categories charge 15%, but rates vary by category, some change at different price points, and some have a minimum fee per item. Check Amazon’s referral fee schedule for your category. |
| FBA fulfillment fee | Set by size tier and shipping weight, and revised by Amazon from time to time. Use the fee your item is charged today, from your fee preview in Seller Central or Amazon’s Revenue Calculator. If you fulfill orders yourself, use your own pick, pack and shipping cost. |
| Other per-unit costs | Anything else you want the result to cover, such as monthly storage, returns, inbound placement fees or packaging. Divide monthly costs by units sold to get a per-unit figure. |
The formula leaves out storage fees, returns and overhead unless you add them to other per-unit costs, and the price should exclude sales tax and VAT.
How to read your result
Break-even ACoS isn’t a target, and there is no break-even ACoS that is good for every product. It is the limit for this product. Compare it, and your target ACoS, with the ACoS your campaigns actually run at.
| Campaign ACoS is | What it means for ad-attributed sales |
|---|---|
| At or below target | Profit at or above the margin you want. |
| Between target and break-even | Profitable, but below the margin you want. |
| Above break-even | Each sale loses money after its ad cost. |
For example, the campaign in the ACoS calculator example runs at a 30% ACoS. Against this product’s 40% break-even, it keeps 10% of each attributed sale as profit: positive, but short of the 15% target. Sellers sometimes accept an ACoS above break-even for a launch or a ranking push, because ads can also lift organic sales that ACoS doesn’t count. The TACoS calculator shows that effect.
Common mistakes
Using the list price
Coupons, deals and promotions lower the price you are paid, and the referral fee follows that lower price. Recalculate for the price customers actually pay while a promotion runs.
Leaving costs out
Storage fees, returns and overhead aren’t in the formula unless you add them to other per-unit costs. Every cost you leave out makes break-even ACoS look higher than it really is.
One number for the whole catalog
Each product has its own price, cost and fees, so each has its own break-even ACoS. Calculate it per product, or per group of products with similar economics, and update it when prices or fees change.
Frequently asked questions
What is a good break-even ACoS?
It isn’t good or bad on its own. It is the product’s margin before advertising, so a higher break-even ACoS leaves more room to spend on ads. A low one means ads have to be very efficient to make money, or that price and costs need work first.
Why is my break-even ACoS zero or negative?
The product’s costs and fees equal or exceed its price, so it loses money before any ad spend. No ACoS is profitable until the price goes up or costs come down.
What is the difference between break-even ACoS and target ACoS?
Break-even ACoS is where ad-attributed sales make zero profit. Target ACoS is lower by the margin you want to keep: with a 40% break-even and a 15% target margin, target ACoS is 25%.
Should I include storage fees and returns?
Yes, if you want the result to cover them. Add an average per-unit amount for storage, returns and anything else you pay per unit to other per-unit costs.
Real fees, not estimates
Agentic Sellar connects Seller Central and Amazon Ads to Claude, ChatGPT and other AI tools. Your AI tool can read the referral and fulfillment fees Amazon actually charged from your financial events, work out each product’s break-even ACoS, and compare it with the ACoS its campaigns run at. Agentic Sellar doesn’t change bids on its own: any change your AI tool proposes needs a write scope and your confirmation before it reaches Amazon Ads.