MOVE THE SLIDERS
Your break-even ACOS, in ten seconds.
Use one ASIN's real numbers. Landed COGS means the unit cost plus what it cost to get it into Amazon.
Move the sliders to see your break-even ACOS.
In the audit we derive this per ASIN from your real margins.
How do you calculate break-even ACOS?
Three numbers, one division:
- Start with the sale price of one unit.
- Subtract landed COGS — what the unit cost you, including getting it into Amazon.
- Subtract Amazon's fees — referral plus FBA fulfilment.
What's left is your pre-ad profit per unit. Divide that by the sale price and you have your break-even ACOS.
Break-even ACOS = (price − landed COGS − Amazon fees) ÷ price
A $30 product with $8 landed COGS and 33% fees leaves $12.10 of pre-ad profit, so break-even ACOS is about 40%. At 40% ACOS that product earns nothing. At 25% it earns money. At 55% every advertised sale costs you.
The 33% in that example is a realistic default, not a guess: Amazon\'s referral fee is 15% in most categories, and FBA fulfilment adds a per-unit charge that pushes the combined take into the low-to-mid thirties for many products. Referral fees do vary — from 8% up to 45% depending on category — so set the fee slider to your own once you know it.
Why does break-even ACOS beat a target ACOS?
Because a target ACOS is a number someone else picked. A 40% ACOS can be excellent on a high-margin product and ruinous on a thin one — the percentage on its own tells you nothing without the margin behind it.
If you have never derived this number, you are optimizing against a figure that has no relationship to your business. That is the single most common reason an account can show falling ACOS and falling profit at the same time.
Is a lower ACOS always better?
No — and this is where accounts get quietly damaged. It is easy to drive ACOS down by cutting bids and pausing campaigns, but volume goes with it, and so does the organic rank that paid traffic was supporting.
When the numbers conflict, the order is profit first, then revenue, then ACOS. ACOS is a diagnostic, not a goal. An agency that shows you a greener ACOS chart while your net profit falls has not done its job.
What this number does not tell you
Being honest about the limits is what makes the number useful:
- It is per ASIN. One product's break-even ACOS says nothing about another's.
- It ignores storage, returns and long-term storage surcharges. Fold those into COGS if you want a stricter figure.
- It assumes your fee percentage is right. Dimension and weight misclassification quietly inflates real fees.
- It says nothing about TACoS — whether ads are building the business or renting it.
- Launches are a deliberate exception. Buying rank above break-even can be correct, if the budget, duration and exit criteria were agreed in advance.
Where to go next
If your ACOS is running above the number you just calculated, the fix is usually structural rather than a bid tweak — see how we run PPC against break-even, or have us derive it per ASIN from your real margins.
Questions people ask about break-even ACOS
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