You should know how to calculate your ACoS (Amazon cost-per-sale), if you sell on Amazon. The problem with Amazon Seller Central’s ACoS calculation is that it doesn’t include a tool to calculate it. ACoS is also affected by PPC campaigns so it is important to calculate both organic and PPC separately.
TACoS
Amazon TACoS measures the revenue generated by a brand or product. Good TACoS should be between 6 and 10 percent. It should also reflect the brand’s marketing goals and performance. The TACoS for new products is generally higher than it is for existing products. TACoS can be used to optimize your marketing strategies and identify blind spots.
Amazon sellers can use the TACoS metric to better understand their overall ad spend. It gives a clear view of how much money has been spent advertising a product. Low TACoS indicates that the product generates strong revenue streams and that advertising costs have been low.
Cost of targeted ad campaigns versus sales
Amazon sellers must spend money in order to make money. To increase your visibility and profit, you need to target different ACoSs for different products. If you are selling a book about writing, your ACOS would be higher than for an ebook on the same subject. This means that the ACOS is more important than the profit.
Your ACoS can be calculated at various levels such as campaign, ad group or keyword. The ACoS is the most important factor in determining how much you earn per sale.
Calculation
Amazon’s average cost of sales (ACoS) is a percentage that is determined by the average order size or sales volume. For most product types and categories, the average ACoS is between 30% to 35%. This means that sellers are making more per sale than they spend advertising. This percentage is an excellent benchmark for anyone looking to make money with Amazon.
After you have calculated your ACoS, it is possible to decide the level of your ad campaign. The ACoS should not exceed your profit margin.
Benchmarking
Amazon’s ACoS (average price per sale) is one key metric to measure performance. These metrics allow sellers to compare their campaigns against other sellers and calculate their effectiveness. ACoS calculates the average selling price, clicks and orders. This metric may also include conversion rate or click-through rates. The ACoS Benchmarker tool allows sellers to track their Amazon performance and identify growth and savings opportunities.
A good ACoS must be lower that the profit margin before advertising in order to achieve it. Higher profit margins are associated with a larger gap. Although profit margins are the most important factor for sellers, they overlook the impact that advertising costs have on the ACoS of the product. A seller can analyze the ACoS ratio to determine the amount of advertising they should spend in order achieve the highest ACoS.
Did you miss our last article… https://zonspeed.com/viral-launch-how-to-make-your-viral-launch-a-success
Did you miss our previous article…
https://reviewsparks.com/blog/viral-launch-how-to-make-your-viral-launch-a-success/
