Amazon sellers with a "good" 25% ACoS can still be in serious trouble. If 90% of their total revenue depends on ads, turning off those campaigns would collapse the business overnight. ACoS doesn't reveal that dependency. TACoS does. TACoS (Total Advertising Cost of Sale) measures your ad spend as a percentage of total revenue, not just ad-attributed revenue. It's the single best metric for understanding whether your Amazon advertising is building a sustainable business or propping up a fragile one.
TACoS = (Ad Spend / Total Revenue) x 100
If you spend $5,000 on ads and your total revenue (organic + paid) is $50,000, your TACoS is 10%. That means advertising accounts for 10 cents of every revenue dollar. Compare that to a seller spending $5,000 on ads with $8,000 in total revenue (TACoS of 62.5%), and you see two very different businesses despite potentially similar ACoS numbers.
Why TACoS Matters More Than ACoS
ACoS tells you how efficiently your ad spend converts into ad-attributed sales. TACoS tells you how much of your total business depends on advertising. The difference matters because:
- ACoS can stay flat while your business gets sicker. If organic sales decline but you increase ad spend to compensate, your ACoS might look the same. Your TACoS will rise, revealing the growing ad dependency.
- TACoS reveals the advertising flywheel. Effective advertising drives sales velocity, which improves organic ranking, which increases organic sales, which lowers TACoS over time. A declining TACoS with growing total revenue is the healthiest signal an Amazon brand can show.
- Investors and acquirers look at TACoS. Amazon aggregators and brand acquirers use TACoS as a primary health indicator. A brand with 8% TACoS is worth more than an identical-revenue brand at 25% TACoS because it's less dependent on paid traffic.
Healthy TACoS Benchmarks by Business Stage
| Business Stage | Typical TACoS Range | What It Means | Goal |
|---|---|---|---|
| New product launch (0-6 months) | 25-40%+ | Heavy ad investment to build visibility, reviews, and sales history. Organic sales are minimal. | TACoS should decline month-over-month as organic ranking improves. |
| Growth phase (6-18 months) | 15-25% | Organic sales are building. Ads are still driving a large share but the ratio is improving. | Focus on organic ranking gains. Review velocity should be strong. |
| Established product (18+ months) | 8-15% | Strong organic presence. Ads supplement and defend rather than carry the business. | Maintain position. Test reducing ad spend to verify organic stability. |
| Market leader / Mature brand | 5-10% | Dominant organic ranking. Ads focus on brand defense and new keyword expansion. | Protect against competitive conquesting. Fund new product launches. |
These ranges come from aggregated data across Jungle Scout, Helium 10, and Perpetua benchmarking reports (2024-2025). Your category matters: highly competitive categories (supplements, electronics, beauty) tend to run 3-5 percentage points higher than less competitive ones.
How to Lower TACoS
Lowering TACoS isn't about cutting ad spend. It's about growing organic revenue faster than your ad spend grows. Three strategies work:
1. Improve organic ranking
Optimize your product listing (title, images, bullets, A+ content) to improve conversion rate. Higher conversion rate signals to Amazon's algorithm that your product deserves higher organic placement. Every organic rank position gained reduces your dependence on paid clicks.
2. Build review velocity
Products with more reviews and higher ratings convert better, which improves organic ranking. Use Amazon Vine, post-purchase follow-ups, and product insert cards to build review count. Moving from 50 to 200 reviews typically produces a measurable improvement in organic conversion rate and, by extension, lower TACoS.
3. Shift ad spend toward high-efficiency campaigns
Not all ad spend is equal for TACoS. Branded Sponsored Products campaigns protect existing sales (necessary but doesn't reduce TACoS). Non-branded exact match campaigns on your best keywords drive new organic ranking signals. Reduce spend on broad, low-converting campaigns and redirect toward keywords where you're on the edge of page 1 organic ranking. Pushing from page 2 to page 1 for a high-volume keyword can dramatically increase organic sales.
TACoS Red Flags
- Rising TACoS with flat total revenue: You're spending more on ads to maintain the same revenue. Organic sales are declining. Investigate why (listing suppression, review issues, new competitors, lost Buy Box).
- TACoS above 30% for an established product: Your product is ad-dependent. Either the listing isn't converting well enough to rank organically, or your category is too competitive for your current market position.
- TACoS and ACoS declining together: This is actually the best scenario. It means ads are getting more efficient AND organic sales are growing. Your advertising flywheel is working.
Example: TACoS Revealing Hidden Ad Dependency
A CPG brand selling vitamins on Amazon had a "healthy" 22% ACoS that their team celebrated monthly. But when they calculated TACoS, the picture changed: 19%. Ad spend accounted for nearly a fifth of every revenue dollar. Organic sales were barely growing while ad spend kept increasing. They shifted strategy: instead of scaling ad spend across all keywords, they focused budget on 15 keywords where they ranked on page 2 organically, aiming to push those to page 1. They also invested in listing optimization and review velocity to improve organic conversion. Six months later, TACoS dropped to 12% while total revenue grew 22%. Organic sales went from 40% to 58% of total revenue. The brand was less dependent on ads and more profitable. Jungle Scout's 2025 seller survey found that 89% of consumers are more likely to buy from Amazon than other e-commerce sites, which means the organic ranking opportunity on Amazon is massive — but only if you're actively building toward it instead of relying on ads to carry all the weight.
Frequently Asked Questions
How often should I check TACoS?
Weekly for active management, monthly for trend analysis. Daily TACoS fluctuates too much due to ad attribution windows and organic sales variability. Weekly gives you actionable trends. Monthly reveals whether your overall strategy is working.
Can TACoS be too low?
Yes. A TACoS below 5% on a growing brand might mean you're underinvesting in advertising. You could be leaving market share on the table by not bidding on competitor terms, not running Sponsored Brands for category visibility, or not defending your listings against competitor conquesting campaigns. Extremely low TACoS in a competitive category often signals missed growth opportunities.
How does TACoS relate to ROAS?
They measure different things. ROAS measures ad revenue per ad dollar (ad efficiency). TACoS measures ad spend per total revenue dollar (business-level ad dependency). A brand can have strong ROAS and unhealthy TACoS if nearly all revenue comes through ads. Use ROAS for campaign optimization. Use TACoS for business strategy.
Read next:
- Amazon ACoS for campaign-level ad efficiency measurement
- ROAS for the cross-platform version of ad performance tracking
- Digital Shelf Optimization for improving the listing quality that drives organic sales