Operator glossary
Break-even ACoS
The ACoS at which an ad sale makes exactly zero profit — equal to your pre-ad contribution margin — and the line every bid strategy should be priced against.
Break-even ACoS equals your contribution margin before ads: (price − COGS − Amazon fees) ÷ price. Sell at $30 with $18 of landed cost and fees and your break-even ACoS is 40% — any campaign under 40% makes money on the tracked sale, anything over it loses money unless it is deliberately buying rank or reviews.
Most accounts we audit have never written this number down per SKU, which means bids are being set against feelings. Compute it per product, not per account: a catalog's blended margin hides the SKUs quietly selling at a loss.
The numbers
- Formula: (price − landed cost − FBA fee − referral fee) ÷ price.
- Worked example: $29.99 price − $7.50 landed − $6.10 FBA − $4.50 referral (15%) = $11.89 margin → 39.6% break-even ACoS.
- Referral fees are 15% for most categories, lower for a few (e.g. ~8% in consumer electronics) — check your category before trusting a blended number.
Primary sources: Amazon selling fees (official)