Amazon PPC
Amazon PPC Break-even Guide
Break-even ACoS tells you the highest ad cost percentage a product can support before an order becomes unprofitable. It is one of the most important numbers for Amazon PPC because the ad dashboard can look successful while contribution profit is negative.
Formula
Break-even ACoS equals gross profit before ads divided by selling price. Target ACoS should be lower than break-even ACoS if you want to preserve profit for overhead and reinvestment.
Example
If a product sells for $40 and has $24 in non-ad costs, gross profit before ads is $16. Break-even ACoS is 40%. If your target margin is 15%, your practical target ACoS should be lower than 40%.
Common mistake
Do not use the same ACoS target for every product. Products with lower margin need stricter bids, while higher-margin bundles may tolerate more aggressive acquisition costs.