For most people, TACOS might sound delicious. But for Amazon sellers, it’s the secret sauce to profitable growth! TACOS (Total Advertising Cost of Sales) measures how well your ad spend is driving total sales, helping you see if your budget is building a sustainable business or just piling on costs. Our audit team digs into TACOS to find ways for brands to grow smarter and leaner. In this post, we’re serving up answers to sizzling questions like “What’s a good TACOS on Amazon?” and “How can you make it even better?” Dig in!
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What is TACOS on Amazon and Why Does It Matter?
TACOS is a key metric on Amazon that measures the effectiveness of your advertising spend with your overall sales. Unlike ACOS (Advertising Cost of Sales), which only measures the cost of ads about ad-driven sales, TACOS takes into account total sales—both ad-driven and organic. This broader scope makes TACOS a vital metric for evaluating the long-term health and profitability of your Amazon strategy.
How TACOS Differs from ACOS
To understand the importance of TACOS, let’s quickly clarify how it differs from ACOS:
- ACOS (Advertising Cost of Sales): This metric is calculated by dividing your ad spend by your ad-attributed sales, showing how much you’re spending to drive each dollar of sales through ads. ACOS is useful for measuring the efficiency of specific campaigns or ad tactics but doesn’t reflect the overall impact on your business.
- TACOS (Total Advertising Cost of Sales): TACOS, on the other hand, is calculated by dividing your ad spend by total sales (including both ad-driven and organic sales). This provides a more comprehensive view of your advertising impact on overall growth. TACOS reflects how much you’re spending on ads relative to total revenue, helping you understand if your ad investment is fostering organic growth or if your sales are overly dependent on paid advertising.
Understanding different Amazon Advertising KPIs can provide deeper insight into your TACOS and ACOS performance. For a comprehensive breakdown of key metrics, check out our guide on Amazon Advertising KPIs.
Why TACOS Is Critical for Assessing the Balance Between Ad-Driven and Organic Growth
A healthy TACOS demonstrates a balanced, synergistic relationship between your ad spend and organic sales. In a well-optimized Amazon account, effective ad campaigns help improve a product’s visibility and keyword rankings, which in turn lead to more organic sales over time. This means you’re both driving direct sales through ads and building a sustainable, long-term sales foundation.
If TACOS is consistently stable or even decreasing as total sales grow, it’s a strong indicator that your ads are supporting organic growth rather than cannibalizing it. Conversely, a high or rising TACOS can indicate that your business is becoming too reliant on ad-driven sales, which may not be sustainable as ad costs rise or as competitors increase their ad spend.
Tracking your organic ranking is essential to understanding the impact of your ad spend on TACOS. Here’s a guide on how to check and track your organic ranking on Amazon.
Why Maintaining a Healthy TACOS Is Important for Long-Term Profitability and Scalability
When TACOS is low or remains steady as your total revenue increases, it means your ad spend is efficiently driving growth without eating into your profit margins. This stability makes it easier to forecast performance, optimize budgets, and scale confidently.
Maintaining a balanced TACOS over time allows you to explore top-of-the-funnel strategies, such as DSP or display ads, to build brand awareness while sustaining profitability. Brands with a strong TACOS are better positioned to achieve long-term growth, adapt to market changes, and outlast competitors who may need to spend more on ads to maintain sales.
What Is a Good TACOS on Amazon?
A “good” TACOS isn’t a one-size-fits-all number—it depends on your industry, competition, and growth goals. But in general, a healthy TACOS is low enough to show that your ad spend isn’t just driving short-term sales; it’s boosting your organic ranking and visibility too. When ad investment leads to organic growth, you’re setting yourself up for long-term success, not just quick wins.
Why Stability in TACOS Matters
Our audit team keeps a close eye on TACOS stability as a sign of a balanced strategy. A steady TACOS tells us that you’re not overspending to get results and that you’ve found a good mix of organic and ad-driven sales. When TACOS fluctuates wildly, it can mean you’re leaning too heavily on ads or that you’re struggling to maintain sales without constant ad spend.
The Ideal: Consistent TACOS as Sales Grow
As your sales increase, TACOS should ideally stay consistent or even decrease slightly. This shows that ad spend is working to support organic growth, not just inflating sales numbers. In other words, you’re getting more for your ad dollars as you grow. This steady TACOS is a key indicator that your account is in a prime position to scale profitably and sustainably.
How to Improve TACOS on Amazon
Ready to make your TACOS even tastier? Here are some top strategies to drive down costs and boost profits without sacrificing growth:
- Leverage Dayparting: Identify peak conversion times and adjust ad schedules accordingly. If certain hours or days convert better, focus spend there to maximize returns and control TACOS. Use third-party tools or manual adjustments for timing precision.
- Start with Lower-Funnel DSP Campaigns: While DSP can cover a broad range of audiences, lower-funnel campaigns (like retargeting recent visitors) often yield high returns. Starting here maximizes the impact of DSP spend on conversions, which drives up sales while keeping TACOS manageable.
- ASIN-Level Optimization: Break down ad performance by individual products (ASINs). By focusing ad budgets on high-ROI products and pulling back on weaker performers, you’ll maximize efficiency and lower TACOS. This is a precise approach that ensures only high-performing ASINs get major ad support.
- Use Amazon’s Brand Analytics for Smarter Keyword Targeting: Brand Analytics offers deep insights into top-performing keywords. By aligning your keyword strategy with high-impact terms, you’ll drive both ad and organic performance. Adjusting content and campaigns based on data keeps TACOS steady as sales grow.
- Experiment with Category Targeting: Use category targeting to capture traffic from related or competitor products. This expands reach and captures incremental sales without always competing in high-cost keyword auctions, helping to control TACOS.
- Create Product Bundles for Cross-Selling: Offering product bundles lets you advertise multiple items together, increasing the average order value and spreading ad spend across a higher revenue total. This helps to keep TACOS low while introducing new products to customers.
- Optimize for Repeat Purchases and Customer Loyalty: Drive repeat purchases by using DSP and Sponsored Brands to retarget past customers and reinforce brand loyalty. Returning customers bring in revenue with minimal additional ad spend, directly improving TACOS.
What Are TACOS Used For?
TACOS as a Profitability and Growth Metric
TACOS (Total Advertising Cost of Sales) is a powerful measure of Amazon ad effectiveness. By comparing ad spend to total sales, TACOS provides a big-picture view of how ads contribute to both paid and organic growth, helping you assess profitability across the board. Unlike ACOS, which only captures ad-driven sales, TACOS shows whether ads are actually boosting organic visibility and supporting sustained growth rather than just driving immediate purchases.
Using TACOS to Identify Growth Opportunities
Our audit team looks at TACOS stability to determine if an account is ready for advanced advertising tactics. When TACOS is consistent or decreasing as total sales grow, it’s a strong indicator that ad spend is effectively building brand momentum and organic reach. This balance signals that the account is primed for expansion through upper-funnel advertising, like Amazon DSP, which can bring in new audiences and increase brand awareness without destabilizing profitability.
TACOS as a Guide for Smarter Budgeting
TACOS isn’t just a measure of past performance—it’s a practical tool for shaping future ad budgets. By monitoring TACOS, brands can make more strategic decisions, like reallocating ad spend to support long-term growth rather than short-term sales. A steady TACOS helps brands confidently scale their budgets, knowing that their ad dollars are building a sustainable, profitable foundation on Amazon.
How to See TACOS on Amazon
How to Calculate TACOS Manually
To calculate TACOS, use this simple formula: TACOS = (Ad Spend) / (Total Revenue)
In this case, total revenue includes both ad-attributed and organic sales. For example, if you spent $1,000 on ads in a month and generated $10,000 in total revenue, your TACOS would be 10%. This ratio shows how much of your revenue is being driven by advertising and helps you track ad spend efficiency relative to overall sales.
Using Amazon Reporting Tools and Third-Party Software
While Amazon doesn’t display TACOS directly in Seller Central, you can find the data points (total sales and ad spend) needed to calculate it in your reports. If you’re looking for a more streamlined approach, several third-party analytics tools offer direct TACOS tracking, automatically updating the metric to save time and provide a clear snapshot of performance.
Why Regularly Reviewing TACOS Matters
It’s essential to review TACOS frequently to catch changes in performance and optimize accordingly. Tracking TACOS month-over-month helps you understand if ad spend is supporting organic growth or becoming a higher percentage of total revenue. With regular TACOS monitoring, you can make data-driven adjustments to ad spend and strategy, ensuring your Amazon campaigns remain profitable and aligned with your long-term goals.
How a Healthy TACOS Drives Long-Term Growth
Our audit team has found that managing TACOS effectively is a cornerstone of sustainable growth on Amazon. Here are the key takeaways from our approach to TACOS optimization:
Stable TACOS Indicates a Well-Balanced Strategy
A steady TACOS shows that ad spend and organic growth are working in harmony. This balance signals that a brand isn’t overly reliant on ads to drive sales and that its organic visibility is strong, which is essential for maintaining profitability as the business scales.
Balanced Accounts Are Primed for Advanced Growth Strategies
When TACOS is stable and the ratio of organic to ad-driven sales is balanced, the account is in an ideal position to leverage advanced strategies like Amazon DSP and upper-funnel brand-building campaigns. This next level of advertising can broaden reach and boost brand awareness without destabilizing profitability.
The Value of Expert TACOS Optimization
Working with Amazon experts to regularly audit and optimize TACOS provides brands with an edge in controlling costs and unlocking growth potential. Our team’s insights and strategies keep TACOS stable, supporting both immediate revenue goals and long-term scalability. With expert guidance, brands can focus on building a profitable foundation that supports expansion on Amazon.
Conclusion
TACOS gives you a snapshot of your brand’s long-term health on Amazon. A balanced, well-managed TACOS shows that your ad spend is fueling sustainable growth, not just quick wins. Regularly auditing your TACOS and adjusting your strategy keeps your brand profitable and ready to scale.
Want to see how your TACOS stacks up? If your monthly ad spend is at least $25,000, our audit team can give you a complimentary detailed audit. These insights will help you uncover new growth opportunities and maximize your Amazon potential. Sign up here today.
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