ACoS, ROAS and TACoS explained
Three numbers tell you whether your marketplace ads make money. ACoS and ROAS measure your campaigns. TACoS measures the whole product. Each one only means something next to your own break-even, which comes from your unit economics.
ACoS: advertising cost of sales
The share of ad-attributed sales you spent on ads. Lower is better.
ACoS
Ad spend ÷ ad-attributed sales × 100
₹20,000 ÷ ₹80,000 = 25%
ROAS: return on ad spend
Sales you get back for every rupee of ad spend. Higher is better. ROAS and ACoS carry the same information.
ROAS
Ad-attributed sales ÷ ad spend = 1 ÷ ACoS
₹80,000 ÷ ₹20,000 = 4.00x
TACoS: total advertising cost of sales
Ad spend as a share of all sales of the product, from ads and organic.
TACoS
Ad spend ÷ total sales × 100
₹20,000 ÷ ₹2,00,000 = 10%
How to find your break-even ACoS
Your break-even ACoS is the highest ACoS at which an ad sale still covers its costs. Work out what one unit earns before ads, then divide by the selling price.
Profit before ads per unit
Selling price ÷ (1 + GST rate) − product cost − marketplace fees − shipping and packaging − returns and other
Break-even ACoS
Profit before ads ÷ selling price × 100
Break-even ROAS
1 ÷ break-even ACoS
Target ACoS
Break-even ACoS − target profit margin
The calculator divides by the price the customer pays, including GST, because marketplace ad consoles report attributed sales at order value. That is an assumption: if your report shows sales before GST, divide profit before ads by the price before GST instead.
Marketplaces charge 18% GST on ad spend. GST-registered sellers claim it back as input tax credit, so it is not a cost here and every ad spend figure is before GST.
Worked example: the ₹549 face wash
This is the FBA face wash from PrimeScale’s Amazon fee calculator and playbook, priced at ₹549 including 18% GST. Its Amazon fees come to ₹161.98 per unit. The seller wants to keep a 10% margin after ads.
| Step | Calculation | Result |
|---|---|---|
| Net sale value | ₹549.00 ÷ 1.18 | ₹465.25 |
| Costs | ₹110.00 product + ₹161.98 fees + ₹20.00 shipping and packaging + ₹5.00 returns | ₹296.98 |
| Profit before ads | ₹465.25 − ₹296.98 | ₹168.27 |
| Break-even ACoS | ₹168.27 ÷ ₹549.00 | 30.65% |
| Break-even ROAS | 1 ÷ 30.65% | 3.26x |
| Target ACoS | 30.65% − 10% | 20.65% |
| Target ROAS | 1 ÷ 20.65% | 4.84x |
| Ad cost per order at target | ₹168.27 − ₹54.90 | ₹113.37 |
Say this product spent ₹20,000 on ads last month, with ₹80,000 of ad sales and ₹2,00,000 of total sales. ACoS is 25%: above the 20.65% target but within the 30.65% break-even, so ad sales make money but less than the target margin. TACoS is 10%, and estimated profit after ads for the month is ₹41,302.
Why TACoS matters more than ACoS for brands
ACoS only counts sales an ad console credits to ads. But ads also lift sales velocity and organic rank, which brings in sales that no campaign gets credit for. A campaign can look expensive on ACoS while the product as a whole is profitable.
TACoS compares ad spend with every sale. As organic sales grow, TACoS should fall even while ACoS holds steady. There is also a simple test: a period makes money after ads whenever TACoS is below your break-even ACoS. That is why PrimeScale calls break-even ACoS your TACoS ceiling.
In the example, a 25% ACoS looks costly next to a 20.65% target. But 60% of sales are organic, TACoS is 10%, and the month is profitable.
ACoS to ROAS conversion table
ROAS is 1 ÷ ACoS. Find your break-even ACoS in the first column to see the ROAS you need.
| ACoS | ROAS | Ad spend per ₹1,000 of ad sales |
|---|---|---|
| 10% | 10.00x | ₹100 |
| 15% | 6.67x | ₹150 |
| 20% | 5.00x | ₹200 |
| 25% | 4.00x | ₹250 |
| 30% | 3.33x | ₹300 |
| 40% | 2.50x | ₹400 |
| 50% | 2.00x | ₹500 |
PrimeScale’s TACoS working ranges
PrimeScale does not use one TACoS target for every brand. We measure TACoS against each product’s ceiling, its break-even ACoS, and place it in one of three zones. These are our working ranges from the Amazon India Playbook, not marketplace rules.
| Zone | TACoS against your ceiling | ₹549 example | What to do |
|---|---|---|---|
| Invest | Above half the ceiling | 15.33% to 30.65% | Keep it to a planned launch window and watch organic share of orders weekly. |
| Build | A quarter to half the ceiling | 7.66% to 15.33% | Harvest search terms weekly and expand into new keywords and variants. |
| Harvest | Below a quarter of the ceiling | Under 7.66% | Protect rank, defend brand terms and test a price increase. |
Above the ceiling, the period loses money after ads. Warning signs that growth is costing too much: ad spend grows faster than total sales for four weeks, organic share of orders falls while ads rise, or profit per unit drops even though revenue is up.
Free PDFGet the Amazon India Playbook10 chapters on fees, listings, ads, ranking and inventory, with a 90-day plan.Frequently asked questions
What is a good ACoS on Amazon India?
There is no single good ACoS, because it depends on your margin. Work out your break-even ACoS first: profit before ads divided by the selling price. A good ACoS sits below your target ACoS, which is break-even ACoS minus the profit margin you want to keep. For a ₹549 face wash with ₹168.27 profit before ads, break-even ACoS is 30.65%, so a 25% ACoS still makes money.
How do I calculate break-even ACoS?
Take the selling price, remove GST, and subtract product cost, marketplace fees, shipping, packaging and returns. That is your profit before ads per unit. Divide it by the selling price the customer pays. If profit before ads is ₹150 on a ₹600 price, break-even ACoS is 25% and break-even ROAS is 4.
How do I convert ACoS to ROAS?
ROAS is 1 divided by ACoS, and ACoS is 1 divided by ROAS. An ACoS of 25% is a ROAS of 4, because ₹25 of ad spend brings in ₹100 of ad sales. An ACoS of 20% is a ROAS of 5, and 50% is a ROAS of 2.
What is the difference between ACoS and TACoS?
ACoS is ad spend divided by sales your ad console credits to ads. TACoS is ad spend divided by all sales of the product, including organic ones. ACoS tells you how efficient your campaigns are. TACoS tells you whether ads are paying for the whole business, because ads also lift organic rank and repeat orders.
What TACoS should I aim for?
Measure TACoS against your own ceiling, which is your break-even ACoS. PrimeScale works with three zones: Harvest below a quarter of the ceiling, Build from a quarter to half, and Invest above half. Invest is fine for a planned launch window. Above the ceiling, the period loses money.
Should I use the price including GST?
Yes. This calculator assumes your ad console reports attributed sales at order value, which is the price the customer pays including GST. Using the same basis for ACoS and for your break-even keeps the comparison fair. Profit before ads is still worked out on the value after GST is removed.
Is GST on ad spend a cost?
Marketplaces charge 18% GST on ad spend. If you are GST-registered, you claim it back as input tax credit, so it is not a cost and this calculator uses ad spend before GST. If you cannot claim it, multiply your ad spend by 1.18 before you enter it.
My ACoS is above break-even. Should I stop ads?
Not straight away. Ad sales above break-even ACoS lose money on their own, but check TACoS and profit after ads for the whole period. If TACoS is under your ceiling, organic sales still cover the ad spend. Cut search terms that spend without orders, lower bids on terms above break-even, and check again next week.