Amazon PPC A→Z · Lesson 4 · 2:59
TACoS: is advertising growing the whole business? ACoS says whether the ad paid for itself; TACoS (ad spend ÷ all sales) says whether advertising grew the whole product. Work it out yourself and read it with organic sales and profit after ads.
The video plays from YouTube (no cookies until you press play). 1 Per product, take 3 months of ad spend (Amazon Ads) and total sales (Business Reports in Seller Central): same dates, same marketplace. 2 TACoS = ad spend ÷ total sales. Organic = total sales − ad sales. Put both next to ACoS. 3 Profit after ads = total sales × (profit-before-ads % − TACoS). TACoS up and profit down: your ads are renting sales you used to get for free. Judging extra ad spend by ACoS alone: ACoS can stay the same while organic sales fall and the product makes less money.
0:00 Same ACoS, two Octobers 0:26 ACoS vs TACoS 0:48 The water bottle in September 1:14 October: two stories 1:42 Profit after ads 2:04 The common mistake 2:14 TACoS has limits too 2:31 Do this today Show Hide 0:00 Same ACoS, more ad spend. Is your business really growing? 0:05 Two Octobers for the same bottle. Both at thirty percent ACoS. 0:10 In one, it makes two hundred and twenty five dollars less. In the other, one thousand six hundred and fifty more. 0:17 ACoS can't tell them apart. TACoS can. 0:21 Lesson four: TACoS. Is advertising growing the whole business? 0:26 ACoS is ad spend divided by the sales your ads brought in. Did the ad pay for itself? 0:32 TACoS divides the same ad spend by all your sales: ad sales and organic sales together. Is the business growing? 0:40 Amazon doesn't show TACoS. Take ad spend from Amazon Ads, total sales from Business Reports in Seller Central, and divide. 0:48 Here's the example: the steel water bottle from lesson three. Forty dollars, fifteen left before ads. 0:56 In September, you spend twelve hundred dollars on ads. They bring four thousand dollars of sales. Thirty percent ACoS. 1:04 But the bottle sells twelve thousand dollars in total. Eight thousand came without an ad. 1:09 TACoS: twelve hundred divided by twelve thousand. Ten percent. 1:14 In October, you raise ad spend by half, to eighteen hundred. Ad sales rise to six thousand. ACoS: still thirty percent. 1:24 Story one: total sales reach thirteen thousand, but organic sales fall to seven thousand. TACoS climbs to thirteen point eight percent. 1:34 Story two: total sales reach eighteen thousand. Organic grows to twelve thousand. TACoS stays at ten percent. 1:42 Now the profit: total sales, times thirty seven point five percent left before ads, minus TACoS. 1:50 September: three thousand three hundred. Story one: three thousand and seventy five. Story two: four thousand nine hundred and fifty. 2:00 In story one, the ads bought sales the bottle used to get for free. 2:04 The common mistake: judging the extra spend by ACoS alone. It said thirty percent in both stories, while organic sales went opposite ways. 2:14 TACoS has limits too. Stock-outs, price changes, deals and the season move it, so check those first. One month is noise: read three. 2:24 And a launch runs it high on purpose: what matters is whether organic sales and profit follow. 2:31 So today: take three months of ad spend and total sales for each product. 2:36 Work out TACoS and organic sales, and put them next to ACoS. 2:41 Then check profit after ads. TACoS up and profit down means your ads are renting sales. 2:48 ACoS says if the ad paid. TACoS says if the business grew. 2:53 Next lesson: what a good ACoS really is. See you there. Not affiliated with Amazon. Numbers in this video are a worked example. Published 28 October 2026.