If you’re running ads on Amazon, you’ve likely come across ACOS (Advertising Cost of Sale). But have you heard of TACoS (Total Advertising Cost of Sale)? While ACOS focuses only on ad performance, TACoS gives a bigger picture of how ads impact overall sales.
Understanding and optimizing TACoS can help sellers improve long-term profitability, reduce ad spend inefficiencies, and build sustainable growth on Amazon.
In this guide, we’ll explain what TACoS is, why it matters, and how sellers—including those using Amazon PPC Australia—can use it to improve their advertising strategy.
What is TACoS in Amazon advertising?
TACoS stands for Total Advertising Cost of Sale and is calculated as:
TACoS = (Total Ad Spend / Total Sales (Ad Sales + Organic Sales) × 100
Unlike ACOS, which only looks at sales generated from ads, TACoS takes into account both organic and ad-driven sales. This makes it a better indicator of how well your ads contribute to your overall business growth.
Why TACoS matters for Amazon sellers
Tracking TACoS is important because it helps sellers understand:
- Ad impact on organic sales – A low TACoS means your ads are driving more organic sales, reducing long-term reliance on paid ads.
- Long-term profitability – If TACoS is too high, you might be overspending on ads without seeing strong organic growth.
- Advertising efficiency – Monitoring TACoS helps sellers refine ad spend and improve return on investment (ROI).
How to analyze your TACoS
When tracking TACoS, here’s what different numbers might indicate:
- Low TACoS (5-10%) – Your organic sales are strong, meaning ads are helping boost rankings and visibility without excessive spending.
- Stable TACoS – Your business is maintaining a good balance between ad spend and organic growth.
- High TACoS (above 20%) – You might be too dependent on paid ads, and organic growth isn’t improving.
Example:
- Seller A spends $1,000 on ads and generates $10,000 in total sales → TACoS = 10%
- Seller B spends $1,500 on ads but only gets $5,000 in total sales → TACoS = 30% (high ad dependency)
How to reduce TACoS and improve profitability
If your TACoS is too high, follow these strategies to improve your ad efficiency:
- Optimize your product listings for better organic ranking
If your listings aren’t well-optimized, you’ll struggle to drive organic sales.
Best practices for Amazon listing optimization:
- Use high-ranking keywords in titles, bullet points, and descriptions.
- Improve product images to increase conversions.
- Get more reviews to build trust.
Sellers working with Amazon marketing services Australia can benefit from expert listing optimization to boost organic rankings.
- Improve ad targeting and bid strategies
Wasted ad spend can lead to high TACoS. Here’s how to refine your campaigns:
- Use high-converting keywords – Focus on keywords that bring actual sales, not just clicks.
- Adjust bidding strategies – Lower bids on underperforming keywords and increase bids on profitable ones.
- Utilize negative keywords – Prevent your ads from showing up for irrelevant searches to reduce wasted ad spend.
If managing PPC feels overwhelming, Amazon PPC Australia experts can help fine-tune ad strategies for better efficiency.
- Focus on customer retention and repeat purchases
A strong brand generates more organic sales through returning customers.
- Offer subscribe & save options.
- Provide great post-purchase customer support.
- Launch brand-focused ad campaigns (Sponsored Brands) to build recognition.
The more repeat customers you have, the lower your TACoS will be over time.
Final thoughts
TACoS is a crucial metric for understanding the long-term impact of ads on your overall Amazon business. By keeping TACoS in check, sellers can ensure their ads are not just driving paid sales but also improving organic rankings and profitability.
If you’re looking to optimize your TACoS and run more efficient campaigns, working with Amazon PPC Australia experts can help fine-tune your strategy and maximize growth.
