What is a normal Amazon ACOS? How to calculate it?

Nowadays, when you open a store online, you must manage the data of your store, because the data can often best reflect the development of your store. How can it reflect some problems? What is the normal Amazon ACOS?

What is the normal Amazon ACOS?

1. Amazon in-site advertising refers to a performance advertising that obtains traffic exposure. ACoS is a very common concept in Amazon advertising. Its full English name is Advertising Cost of Sale, which refers to the ratio of Amazon in-site advertising expenses to sales revenue.

2. The specific calculation formula is as follows:

Advertising Cost of Sales (ACoS) = total ad spend/total sales

= (number of clicks*click bid)/(number of advertising orders*unit price P) = C*B/O*P

The smaller the ACoS value, the better the benefit of advertising investment.

Many people may ask, what is a reasonable ACoS? In fact, there is no unified measurement standard for the reasonable ACoS value depending on the product, industry, and purpose of the campaign.

3. If the seller’s purpose of advertising is to promote product sales and improve product organic search rankings, then the ACoS only needs to break even. If it is for the promotion of new products, a higher ACoS can be set first. For mature product advertising, a high ACoS will definitely not be effective.

According to foreign data statistics, the average Amazon ACoS is 30%, while a better ACoS should be between 15-20%.

If your ACoS is high, it may be due to inaccurate keywords, low conversion rate, lack of product diversity, etc. You can consider lowering your ACoS from the following four aspects.

4. Optimize keywords. When choosing keywords, try to consider the user's usage scenarios or search habits. You can use different keywords for multiple products to conduct short-term tests and quickly screen out high-conversion keywords. You can also use Amazon word selection tools such as Sonar to select keywords and embed them into product descriptions. Remember not to pile up keywords.

Optimize product descriptions. Amazon makes recommendations based on product information, so make sure your products meet the user's search requirements as much as possible. The more relevant the product, the higher the conversion rate.

5. Optimize product titles. The title determines the user's first impression. It must contain the most core keywords and provide relevant words as much as possible, such as product color, style, material, size, etc. The more relevant the title is, the more traffic it can attract.

6. Determine the right price. It is wrong to advertise at a price that is too high or too low. The correct pricing method is:

Bid = (average order value * conversion rate) / (1 / target ACoS)

This is the end of the introduction to the data calculation method of Amazon ACOS. It actually refers to the ratio of Amazon’s on-site advertising expenses to sales revenue. Now that you know how to calculate it, you will know whether it is normal based on your actual situation.

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