Amazon PPC A→Z · Lesson 3 · 2:19
ROAS and ACoS ROAS is ACoS flipped, so neither is better. Work out your break-even (profit before ads ÷ price) and judge every campaign against it, in whichever unit you report.
The video plays from YouTube (no cookies until you press play). 1 For each top product: break-even ACoS = profit before ads ÷ price (break-even ROAS = price ÷ profit before ads). 2 Pick one unit for your reports and keep it. To switch: ROAS = 1 ÷ ACoS. 3 Set the target below break-even: break-even × (1 − the share of profit you keep). Judging a campaign by someone else's "good" number (4x ROAS, 25% ACoS) instead of the product's own break-even.
0:00 Same ROAS, two results 0:20 One number, upside down 0:34 The water bottle example 0:53 Three bids in ACoS and ROAS 1:16 Your break-even 1:31 Setting a target 1:38 The common mistake 2:01 Do this today Show Hide 0:00 ROAS or ACoS: which number tells you if an ad makes money? 0:05 Two bottles, both at four times ROAS. 0:08 On four hundred dollars of ad sales, one keeps fifty. The other loses twenty. 0:14 The difference is your break-even. Let's find it. 0:17 Lesson three: ROAS and ACoS. 0:20 ACoS is ad spend divided by ad sales. 0:24 ROAS flips it: ad sales divided by ad spend. 0:28 So thirty percent ACoS is a ROAS of three point three three. One number, upside down. 0:34 Here's the example. You sell this steel water bottle for forty dollars. 0:39 After the product cost and Amazon's fees, fifteen dollars is left before ads. 0:45 And one in ten shoppers who click the ad buys it. 0:48 A hundred clicks bring ten sales: four hundred dollars of ad sales. 0:53 Bid one dollar fifty, and those clicks cost a hundred and fifty. Thirty seven point five percent ACoS, a ROAS of two point six seven. You keep nothing. 1:03 At one dollar twenty: thirty percent, or three point three three. You keep thirty. 1:09 At ninety cents: twenty two point five percent, or four point four four. You keep sixty. 1:16 So your break-even ACoS is the fifteen dollars before ads, divided by the forty dollar price. Thirty seven point five percent. 1:24 Flip it for ROAS: two point six seven. The same line as your one dollar fifty click worth. 1:31 Keep twenty percent of the profit, and your target is thirty percent ACoS. That's the one dollar twenty bid from lesson two. 1:38 The common mistake: chasing someone else's good number. This glass bottle also sells for forty dollars, but only eight is left before ads. Break-even: twenty percent ACoS, or a ROAS of five. 1:53 At four times ROAS, four hundred dollars of sales cost a hundred in ads. It earns eighty. It loses twenty. 2:01 So today: find each product's break-even, pick one unit for your reports, and set your target below the line. 2:08 ROAS or ACoS, the line is your break-even. 2:12 Next lesson: TACoS, and whether your ads grow the whole business. See you there. Not affiliated with Amazon. Numbers in this video are a worked example. Published 26 October 2026.