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Is your Amazon ad spend inside your margin?
ACoS flatters you — it only counts the revenue advertising takes credit for. TACOS measures spend against every dollar you sell, which is the number that has to fit inside your contribution margin. Put in your figures and get both, plus the monthly ad-spend ceiling your target net margin actually allows.
Your TACOS
15.0%
Ad spend as a share of total revenue. Your ACoS says 33.3% — the gap between those two numbers is how much of your business advertising is actually carrying.
Healthy: 17.0% net after ads, with $8,400 a month of headroom before you hit your 10% floor.
How we got the number
TACOS = $18,000 spend ÷ $120,000 total revenue = 15.0%
ACoS = $18,000 ÷ $54,000 ad-attributed = 33.3%
Net margin = 32% contribution − 15.0% TACOS = 17.0%
Ceiling = (32% − 10%) × $120,000 = $26,400
How this works
- What is TACOS and how is it calculated?
- TACOS (total advertising cost of sale) is ad spend divided by total revenue — every sale, not just the ones advertising gets credit for. ACoS divides the same spend by ad-attributed revenue only. Because ACoS uses a smaller denominator it always looks better, and it hides the case where ads are funding sales that would have happened organically anyway.
- What is a good TACOS?
- There is no universal number, and anyone quoting one is guessing about your business. TACOS only means something against your contribution margin: if you keep 32% after COGS, FBA fees, referral fees and returns, then 32% TACOS is break-even and 20% leaves you 12% net. That's why this calculator asks for your margin — the ratio alone can't tell you whether you're profitable.
- Why is my ACoS good but my TACOS high?
- Because advertising is carrying a large share of your total revenue. A low ACoS with a high TACOS means ads convert efficiently but very little arrives organically, so the business depends on continuous spend. The organic-share figure here is the one to watch: if it falls while TACOS rises, you're buying revenue you used to get free.
- How do I work out my contribution margin before ads?
- Start with the selling price, then subtract unit cost, inbound freight, the FBA fulfilment fee, the referral fee, storage, and an allowance for returns. What's left is what advertising is allowed to eat into. If you're importing, our landed-cost calculator builds that number from the factory quote up.
- Does this include AI-driven demand like Rufus?
- Not as a separate line — it works off your reported revenue, which already includes it. But it's the reason TACOS matters more than it used to: when a shopper asks Rufus what to buy and your listing gets recommended, that sale often carries no ad click. It lands in total revenue and never touches ACoS, so ACoS gets less informative every quarter.
The ratio is the symptom. The listing is the cause.
High TACOS usually means organic isn't carrying its weight — weak attributes, a listing Rufus can't read, or the wrong browse node. The free Readiness Score shows which.