Amazon PPC (Pay-Per-Click) advertising is essential for product visibility, but it can quickly eat into profits if not managed properly. Our PPC Estimator helps you plan your advertising budget and understand key metrics.

What is ACOS?

ACOS (Advertising Cost of Sales) is the percentage of ad spend relative to ad-attributed revenue:

ACOS = (Ad Spend / Ad Revenue) × 100%

For example, if you spend $100 on ads and generate $400 in sales, your ACOS is 25%.

Lower ACOS = More efficient advertising

What is TACOS?

TACOS (Total Advertising Cost of Sales) includes both ad spend and product costs:

TACOS = ((Ad Spend + Product Cost) / Total Revenue) × 100%

TACOS shows the true cost of advertising, including product expenses.

What is a Good ACOS?

A good ACOS depends on your profit margins:

• 20-30%: Excellent ACOS for most products
• 30-40%: Acceptable if you have high margins
• 40%+: Too high, optimize campaigns

However, ACOS should be considered alongside profit margins. A 40% ACOS might be acceptable if you have 60% profit margins.

How to Estimate PPC Costs

Our PPC Estimator helps you:

1. Estimate required ad spend for sales goals
2. Calculate ACOS and TACOS
3. Determine cost per click (CPC)
4. Plan monthly advertising budget

Real-World Example

Let's say you want to sell 100 units/month through ads:

• Selling price: $29.99
• Conversion rate: 12%
• Cost per click: $1.50
• Target ACOS: 25%

Required clicks: 100 / 0.12 = 833 clicks

Ad spend: 833 × $1.50 = $1,250

Ad revenue: 100 × $29.99 = $2,999

ACOS: ($1,250 / $2,999) × 100% = 41.7%

This ACOS is high. You'd need to either reduce CPC, improve conversion rate, or accept lower ACOS target.

PPC Budget Planning Tips

• Start with 10-15% of revenue for PPC budget
• Scale up successful campaigns gradually
• Focus on high-converting keywords
• Monitor ACOS and adjust bids
• Test different ad types (sponsored products, brands, display)