How to lower ACoS on Amazon without losing sales
To lower ACoS, cut search terms that spend without selling, set bids from a target ACoS instead of guessing, move budget to placements and keywords that convert, and improve the listing so more clicks become orders. ACoS is cost per click divided by sales per click, so every fix either lowers CPC or raises conversion and order value.
- Diagnose before you cut
- Bid formula with examples
- Fix conversion, not just bids
By Asad Razzaq, Senior Amazon PPC StrategistUpdated 1 November 2026Why is your ACoS high?
ACoS is ad spend divided by ad sales. Break both sides down per click and you get a more useful version: ACoS equals cost per click divided by conversion rate multiplied by average order value. That means a high ACoS has only three possible causes. You are paying too much per click, too few clicks turn into orders, or each order is worth too little.
Diagnose before you cut. Open the search term report for the last 30 to 60 days and sort by spend. In most accounts a small group of search terms takes a large share of spend with few or no orders. Then look at conversion rate by campaign and by product: if CPC looks normal but conversion is weak, lowering bids will only shrink sales. The problem is on the listing, the price or the offer.
Also check whether a high ACoS is actually a problem. Compare it with your break-even ACoS, which is your profit margin before ad costs. A 28% ACoS is fine on a product with a 40% margin and a disaster on one with 20%.
What formulas help you lower ACoS?
All figures below are hypothetical round numbers.
| Formula | What it tells you | Example |
|---|---|---|
| ACoS = CPC / (CVR x AOV) | The three levers: cost per click, conversion rate, average order value | Example: £0.80 / (10% x £20) = 40% |
| Raise CVR only | Better listing or price lifts conversion | Example: £0.80 / (12.5% x £20) = 32% |
| Lower CPC only | Bid cuts or better placements | Example: £0.64 / (10% x £20) = 32% |
| Both together | Small gains on two levers compound | Example: £0.64 / (12.5% x £20) = 25.6% |
| Target bid = AOV x CVR x target ACoS | The highest CPC you can pay and still hit target | Example: £20 x 10% x 25% = £0.50 |
| Break-even ACoS = margin before ad costs | The ceiling above which ad sales lose money | Example: £6 left from a £20 sale = 30% |
What are the steps to lower ACoS?
Work through them in this order. The first two usually deliver the fastest gains.
Lever 1
Cut search terms that spend without selling
In the search term report, find terms with clicks well above what you would expect to need for an order (for example, more than twice the clicks your average order takes) and no sales. Add irrelevant ones as negative exact or negative phrase. Lower bids on relevant ones rather than blocking them outright.
Lever 2
Set bids from a target, not a feeling
Use target bid = AOV x CVR x target ACoS for every keyword with enough data. Raise bids on terms well under target and lower them on terms over it. Change bids in steps rather than all at once so you can see the effect.
Lever 3
Move winners into exact match
Search terms that convert in auto, broad or phrase campaigns should get their own exact-match target with its own bid, and be added as negative exact in the source campaign so the two do not compete.
Lever 4
Check placements and bidding strategy
Compare top of search, rest of search and product page placements. Add a placement bid adjustment only where conversion justifies it, and use dynamic bids down only on campaigns that are over target.
Lever 5
Lift conversion on the listing
Improve the main image, title, bullet points, A+ content and reviews, and keep the price competitive. A higher conversion rate lowers ACoS at the same bid, and it helps organic rank too.
Lever 6
Raise order value
Multipacks, bundles and variations that lift average order value reduce ACoS without touching bids, because each click is worth more.
Which quick fixes work in the first week?
If you need results fast, start with the search term report and negative keywords. Removing obvious waste such as wrong product types, wrong sizes, competitor brand searches that never convert and searches for things you do not sell has an immediate effect on spend with almost no effect on sales.
Next, check campaigns that run out of budget early in the day while other campaigns overspend on poor terms. Shifting budget from weak campaigns to strong ones lowers blended ACoS straight away.
Finally, pause ads on products that are out of stock, low on stock or losing the Buy Box. Sponsored Products ads generally stop serving when you are not the featured offer, and products with stock problems convert poorly even when ads do show.
What ACoS reductions look like in a real account
In a UK private-label account we manage, one product line’s ACoS fell from 18.5% to 10.3% in a single month (September to October 2026), and another from 10.7% to 6.4% over two months (August to October). Two more moved from 10.4% to 7.5% and from 10.9% to 8.4% over the same two months. The strongest product lines in that catalogue run at 17x to 20x ROAS, about 5% to 6% ACoS.
When is lowering ACoS the wrong goal?
ACoS is not a score to minimise at any cost. The easiest way to get a very low ACoS is to advertise only on your own brand name and a handful of safe keywords. ACoS will look excellent while total sales flatten and competitors take the traffic you stopped bidding for.
During a launch, or when you are pushing a product up the rankings for a valuable keyword, a higher ACoS can be the right choice, because the ad sales build the sales history that lifts organic rank. Set a time limit and a ceiling, then bring bids back towards target once rank holds.
Watch TACoS alongside ACoS. If ACoS falls and TACoS falls too, you are becoming more efficient and the business is growing. If ACoS falls but total sales fall with it, you have cut too deep. Our guide to ACoS vs TACoS explains how to read the two together.
Frequently asked questions
What is the fastest way to lower ACoS?
Add negative keywords for search terms that spend without selling. It cuts wasted spend within days and rarely costs you meaningful sales.
Should I just lower all my bids?
No. Blanket bid cuts reduce spend and sales together and can hurt your strongest keywords. Lower bids only where a keyword runs above your target ACoS.
How long does it take to lower ACoS?
Waste reduction shows within one to two weeks. Bid changes and listing improvements usually need three to six weeks, partly because attributed sales keep updating for up to 7 or 14 days after a click.
Does lowering ACoS hurt organic ranking?
It can if you cut ad spend on keywords where ads were driving the sales that support your rank. Keep spending on relevant, converting keywords and cut only waste.
What ACoS should I aim for?
Below your break-even ACoS on established products, with an agreed higher ceiling for launches. Work it out from your margin with our ACoS calculator.
Co-Founder and Senior Amazon PPC Strategist at Advorza. Managing Amazon accounts since 2020 across 15+ US and UK brands. About the founders
Keep reading
ACoS calculator
ACoS (advertising cost of sales) is your Amazon ad spend divided by the sales those ads generated, shown as a percentage.
ACoS vs TACoS
ACoS measures ad spend against the sales your ads directly generated; TACoS measures ad spend against all your sales, paid and organic.
Amazon PPC management
Amazon PPC management is the weekly work of structuring, bidding and pruning your Sponsored Products, Sponsored Brands and Sponsored Display campaigns so ad spend turns into profitable sales.
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