Amazon TACoS: What It Is & Strategies to Improve It (2025)

Understanding Amazon TACoS (Total Advertising Cost of Sale) is key to assessing the efficiency of your advertising efforts on the platform. It goes beyond just tracking ad spend by factoring in organic sales, providing a comprehensive picture of how well your Amazon advertising strategy is performing relative to your overall sales. In 2025, with rising competition and increasing ad costs, monitoring and improving your TACoS Amazon can help you scale your business sustainably.

In this article, we’ll dive into what TACoS on Amazon is, why it matters, and strategies to optimize it, so you can make more informed decisions about your Amazon PPC campaigns and achieve higher profitability.

What is TACoS in Amazon?

TACoS (Total Advertising Cost of Sale) is a metric used by Amazon sellers to measure the efficiency of their advertising spend in relation to both paid and organic sales. Unlike ACoS (Advertising Cost of Sale), which only considers ad-attributed sales, TACoS includes organic sales to provide a more complete picture of your advertising effectiveness.

It is calculated by dividing your total ad spend by the sum of your total sales (both ad-attributed and organic) over a given period:

A low TACoS indicates that your ads are effectively driving both paid and organic sales without overspending, while a high TACoS suggests that your business may be relying too heavily on ads, potentially increasing costs without a proportional return.

Difference Between Amazon TACoS and ACoS

ACoS and TACoS are both important metrics for assessing the effectiveness of your Amazon ads, but they serve different purposes. Here's a quick comparison:

Why Sellers Rely on TACoS:

TACoS is crucial for strategic decision-making as it includes organic performance, which ACoS doesn’t. Sellers rely on TACoS because it shows the overall impact of advertising on both paid and organic sales. By tracking TACoS Amazon, sellers can make better decisions about how to scale their ad campaigns while optimizing for sustainable growth.

Why is Amazon TACoS Important?

TACoS is a crucial metric for understanding the overall effectiveness of your Amazon advertising strategy because it includes both paid and organic sales. Here’s why it matters:

Measures true profitability:

Unlike ACoS, which only looks at ad-attributed sales, TACoS gives a more complete picture by factoring in organic sales as well. This makes it a better indicator of overall profitability because it shows how ads are influencing both paid and organic revenue streams. A well-balanced TACoS indicates that your ads are supporting sustainable growth, not just driving sales that come at a high cost.

Tracks brand growth:

Over time, a declining TACoS generally signals growing organic sales, meaning your ads are effectively boosting your product’s visibility and rankings. As your brand gains traction, you should see less reliance on paid ads and more organic traffic, resulting in a healthier and more profitable business model.

Reveals ad efficiency in relation to business performance:

TACoS shows how well ads are working in the context of your entire business. If your TACoS is too high, it may suggest that you are overly reliant on ads, possibly hurting long-term organic growth. Conversely, a low TACoS indicates that your ads are helping grow your brand efficiently and are aligned with organic sales.

Helps guide long-term strategy:

TACoS is invaluable for long-term decision-making. By tracking TACoS, sellers can assess if their ad spend is contributing to sustainable growth or simply inflating their ad costs without supporting long-term sales. A high TACoS may signal the need for adjustments in strategy, such as improving organic listings or refining targeting.

Enables smarter budget allocation:

By tracking TACoS across different campaigns or products, sellers can identify where their ad spend is generating the best results, both in terms of paid and organic sales. This allows for better budget allocation, focusing on high-performing campaigns and products that support long-term profitability, while cutting back on underperforming ads.

By using analytics tools you can monitor and refine your TACoS and ensure that your ads are delivering the expected ROI.

How to Calculate Amazon TACoS?

To calculate TACoS on Amazon, follow these steps:

1. Find your total ad spend: This is the total amount spent on Amazon PPC ads over a specific period.
   
2. Find your total sales: Add up both your ad-attributed sales and organic sales during the same period.
   

Calculate TACoS: Use the formula below:

What is a Good TACoS on Amazon?

A good TACoS generally falls between 5% and 15%, with many experts considering 6% to 10% as an ideal range for most sellers. Here’s what different ranges indicate:

• Lower TACoS (5%-10%): This range shows that ads are driving organic sales effectively. It means that your advertising efforts are helping to boost your organic visibility, generating sales without overspending on ads.
  
• TACoS between 10%-20%: A TACoS in this range suggests moderate ad investment, which may be acceptable for newer products or businesses in the early stages. However, it signals room for optimization.
  
• TACoS above 20%: This is a warning sign that your business may be overly reliant on paid ads, spending a significant portion of revenue on advertising. It indicates a need to improve organic sales and adjust your ad strategy.
  

Why Not Aim for Zero TACoS?

While you might think that aiming for zero TACoS would be ideal, this could mean that you’re under-utilizing Amazon PPC. Ads should be part of a broader strategy to boost organic rankings and overall sales growth, not eliminated entirely. 

Brands and sellers who leverage advanced analytics tools to track and optimize their TACoS are often able to stay ahead of the competition, ensuring their ad spend is used efficiently to drive sustainable growth.

Factors Affecting Amazon TACoS

Several factors influence Amazon TACoS, and understanding these can help optimize your ad spend for better performance. Here’s a breakdown of the key factors:

1. Product Age and Listing History

The age of your products and the history of your listings can have a significant impact on TACoS. New products typically require higher ad spend to gain visibility, leading to a higher TACoS initially. Over time, as your products gain traction and improve organic rankings, your TACoS should decline. Older products with stronger organic visibility often require less ad spend and see lower TACoS.

2. Ad Type and Targeting Strategy

The type of ad you run and the effectiveness of your targeting strategy play a major role in determining TACoS. Different ad types like Sponsored Products and Sponsored Brands come with varying costs and effectiveness in driving conversions. The precision of your targeting also affects how much you spend on ads relative to your sales.

Saras Pulse allows you to monitor the performance of different targeting strategies, enabling you to adjust your campaigns in real time. By optimizing targeting and ad types, you can reduce TACoS while improving overall ad efficiency.

3. Organic Sales Performance

Strong organic sales can lead to a lower TACoS, as ads help boost organic rankings over time. If your organic sales are weak, you may find yourself overly reliant on paid ads, resulting in a higher TACoS. As your organic presence grows, your TACoS should naturally decline.

4. Keyword Selection and Optimization

Choosing the right keywords for your ads is critical for achieving a low TACoS. Using high-converting keywords that closely match customer search intent can improve ad performance, driving more relevant traffic at a lower cost. Poor keyword selection, on the other hand, can lead to wasted ad spend and higher TACoS.

5. Seasonality and Demand

Seasonal trends and fluctuating demand can impact TACoS. During high-demand seasons (e.g., holidays), your ads may perform better, driving more sales and potentially lowering TACoS. However, increased competition during these times can drive up ad costs, making it essential to carefully manage your ad spend.

With Saras Pulse, you get real-time insights into how seasonality and changing demand are affecting your ad performance. By tracking these trends, you can adjust your ad strategies, such as increasing budgets during peak seasons or optimizing campaigns during slower periods, to maintain an efficient TACoS.

Strategies to Improve Amazon TACoS

Improving your Amazon TACoS is essential for optimizing your ad spend and driving long-term business growth. By implementing the right strategies, you can ensure your ads are contributing effectively to both paid and organic sales. Here are key strategies to help you improve your TACoS:

1. Optimize Product Listings for Organic Visibility

Optimizing your product listings is crucial for improving organic visibility, which directly impacts TACoS. When your listings are well-optimized, your organic sales increase, reducing the need for excessive ad spend. This can help lower your TACoS over time. 

Make sure your product titles, descriptions, and bullet points are clear and relevant, using high-converting keywords that align with search intent. Additionally, high-quality images and positive reviews can improve your conversion rates, contributing to both organic growth and ad efficiency.

2. Increase Average Order Value (AOV)

Increasing your Average Order Value (AOV) is another effective way to improve TACoS. When you increase the value of each sale, the cost of advertising becomes a smaller percentage of the overall sale, which lowers TACoS. You can increase AOV by offering product bundles, promotions, or upselling higher-value products. This will not only improve your TACoS but also help drive more revenue with less ad spend.

Using Saras Pulse, you can identify trends in customer purchasing behavior and determine which products or bundles have the potential to increase AOV. With this data, you can strategically run campaigns to promote those high-margin products, optimizing ad spend and improving your overall TACoS.

3. Focus on Long-Tail Keywords in Ads

Focusing on long-tail keywords in your Amazon ads is an excellent way to improve TACoS. Long-tail keywords are less competitive, more specific, and often have higher conversion rates, as they capture users with a clear intent to purchase. While they may not drive as much traffic as broader keywords, they tend to bring in more qualified leads at a lower cost, improving ad efficiency.

4. Leverage Seasonal and Promotional Campaigns

Seasonal trends and promotions can significantly impact TACoS. During peak shopping periods, such as holidays or major sales events, demand increases, which can drive more sales at a lower cost per click (CPC), improving conversion rates and lowering TACoS. Running well-timed promotions or seasonal campaigns allows you to take advantage of this increased demand while optimizing your ad spend.

5. Refine Targeting and Audience Segmentation

Refining your ad targeting is crucial for improving TACoS. The more precisely you can target relevant customers, the more likely your ads will convert, reducing wasted ad spend. Use Amazon's targeting options to focus on specific demographics, interests, or previous shopping behaviors. Additionally, you can segment your audience based on past purchases, location, or device usage.

Saras Analytics can help here by creating detailed customer segments based on behaviors and purchase patterns, ensuring your ads reach the most responsive audiences. It also tracks customer movements between segments, helping you identify churn and adjust your strategy to retain valuable customers, ultimately optimizing ad spend and improving TACoS over time.

6. Continuous A/B Testing and Optimization

A/B testing allows you to compare different ad creatives, landing pages, and bidding strategies to see what works best. Regular testing helps you identify the most effective ad copy, keywords, and targeting strategies, which ultimately drives better results at a lower cost. Testing should be an ongoing part of your advertising strategy to ensure continuous optimization.

7. Track TACoS Across Product Variations and Lifecycle Stages

It’s important to monitor TACoS across different product variations and throughout the lifecycle of each product. New products typically require higher ad spend to gain visibility, which results in higher TACoS. 

As the product matures and gains organic traction, the TACoS should decrease. Tracking TACoS across different stages of the product lifecycle allows you to adjust your strategy accordingly, ensuring that you’re not overspending on ads once organic sales start to take off.

If you need valuable insights for tracking TACoS across product variations and lifecycle stages, Saras Pulse can help you out by identifying high-value customer cohorts and adjusting ad spend for different stages. It also helps pinpoint the best acquisition channels and products, optimizing ad placement and bidding strategies, ensuring you're not overspending on ads for low-value customers.

Lower Your Amazon TACoS with Saras Analytics

To effectively reduce your TACoS, you need data-driven insights and continuous optimization. Saras Analytics offers powerful features that help you track ad performance, optimize product listings, and refine targeting strategies—all in one place. By integrating data from Amazon ads, organic sales, and other channels, Saras Analytics provides a holistic view of your ad performance, making it easier to optimize campaigns and achieve lower TACoS.

Start today—try Saras Analytics for free and unlock the full potential of your Amazon ads.