ACoS
ACoS (Advertising Cost of Sales) is the percentage of your advertising spend relative to the revenue you achieved with those ads. You can read more about it here.
Calculating your ACoS
You calculate your ACoS by dividing the total amount you spent on advertising by the revenue you earned from it. If you spent €10 on ads and earned €100 in revenue from them, your ACoS is 10%.
Example
Imagine: you sell kitchen scales for €27 each. You pay €5.67 VAT, so the selling price after VAT is €21.33.
You buy the scale for €6, shipping costs €8, and you pay €2 commission. After deducting all costs from the selling price, you have
€5.33 left. This is the profit you make per item without advertising. This means you can spend up to €5.33 on ads without making a loss on the item.
To calculate your ACoS, simply divide the amount available for advertising costs by the selling price (€5.33 / €21.33 = 0.24).
This gives you an ACoS of 24%.
What is a good ACoS?
A good ACoS is about more than just profit - it's also about growth! Efficient advertising directly drives sales, while investing in your brand ensures more visibility and new customers.
Branded Shelves is specifically designed for the consideration phase. This is where potential buyers explore their options, so strong visibility can truly make a difference.
Your ACoS might therefore look different than for sponsored products. Make sure your ACoS aligns with both your profit goals and brand strategy for long-term success.