Amazon ACOS reduction is the most important goal for any serious Amazon PPC advertiser. If your Amazon ACOS is sitting above 20%, 30%, or even higher you are not alone. High ACOS is one of the most common problems Amazon sellers face, and it silently kills your profitability while you are focused on growing revenue.
The good news? ACOS is entirely controllable. With the right strategy, you can bring it down to 15% or below and we have done it repeatedly for our clients.
In this guide, we will walk you through exactly how.
What Is ACOS and Why Does It Matter?
ACOS stands for Advertising Cost of Sale. It tells you what percentage of your ad revenue was spent on advertising.
Formula: ACOS = (Ad Spend ÷ Ad Revenue) × 100
Example: If you spent $150 on ads and generated $1,000 in ad sales, your ACOS is 15%.
A lower ACOS means you are spending less to generate each dollar of revenue which means more profit in your pocket.
What is a good ACOS?
It depends on your product margins, but as a general rule:
- Below 10% — Excellent
- 10% to 15% — Very Good
- 15% to 25% — Acceptable
- Above 25% — Needs immediate attention
Amazon ACOS Reduction 7 Proven Strategies
1. Audit Your Campaigns and Kill What Is Not Working
Most sellers run campaigns for months without auditing them. The result? Money draining into keywords and targets that never convert.
Start with a full campaign audit. Look at every campaign, ad group, and keyword. Anything with high spend and zero or low sales needs to be paused or restructured.
The 80/20 rule applies here. Usually, 20% of your keywords drive 80% of your results. Find those keywords and double down on them.
2. Master Your Search Term Reports
The search term report is the most valuable data source in Amazon PPC and most sellers ignore it.
Every week, download your search term report and look for:
- Search terms with high spend and no sales add these as negative keywords immediately
- Search terms with sales and good ACOS add these as exact match keywords
- Search terms that are irrelevant to your product add as negative phrase or negative exact
This weekly habit alone can reduce your ACOS by 20% to 30% within a month.
3. Structure Your Campaigns Properly
Poorly structured campaigns are one of the biggest ACOS killers. If your auto campaigns and manual campaigns are mixed together with no clear strategy, you will never get control of your spend.
Here is the structure we use for every client:
Auto Campaign Used for discovery. Lower bids, let Amazon find new search terms for you.
Manual Broad Campaign Used for research. Moderate bids on broad match keywords to find converting terms.
Manual Phrase Campaign Used to capture intent. Bid on phrase match keywords that have shown conversion data.
Manual Exact Campaign Used to scale winners. High bids only on your top-converting exact match keywords.
Competitor Targeting Campaign Used to steal market share. Target competitor ASINs.
This structure gives you full control over where your money goes.
4. Fix Your Bids Using the ACoS Target Method
Most sellers set bids randomly. This is a mistake.
Your bid should be directly tied to your target ACOS and your conversion rate.
Formula: Max CPC = (Target ACOS × Average Order Value × Conversion Rate)
Example: If your target ACOS is 15%, your average order value is $35, and your conversion rate is 10%, your max CPC should be:
0.15 × $35 × 0.10 = $0.525
Never bid more than this number for that keyword. This keeps your ACOS mathematically in control.
5. Improve Your Listing Conversion Rate
Here is something most PPC managers miss: ACOS is not just a PPC problem. It is also a listing problem.
If your listing is not converting well, even perfectly optimized ads will have high ACOS. Every click that does not convert is wasted ad spend.
To improve your conversion rate:
- Optimize your main image for CTR it is the first thing shoppers see
- Rewrite your title and bullets to be benefit-focused, not just keyword-stuffed
- Add premium A+ Content to build trust and answer objections
- Get more reviews social proof directly impacts conversion rate
A 1% improvement in conversion rate can reduce your ACOS by 10% to 20%.
6. Use Dayparting to Stop Wasting Budget
Most Amazon sellers run ads 24 hours a day, 7 days a week. But data consistently shows that certain hours and days convert better than others.
Pull your hourly performance data and look for patterns. Are conversions dropping between midnight and 6am? Turn off or reduce bids during those hours.
This alone can cut wasted spend by 10% to 20% without reducing your overall sales volume.
7. Separate Brand and Non-Brand Campaigns
One of the most common mistakes we see is mixing branded keywords with non-branded keywords in the same campaign.
Your branded keywords people searching for your brand name directly — will always have a much lower ACOS than non-branded terms. Mixing them inflates your non-brand ACOS and makes it impossible to see the true performance of your prospecting campaigns.
Separate them immediately. Create dedicated brand defense campaigns with lower bids, and use your budget primarily on non-branded keywords where the real growth happens.
Real Results: What This Looks Like in Practice
For one of our clients a health and wellness brand selling on Amazon US we implemented all seven of these strategies over 90 days.
Results after 90 days:
- ACOS: 34% → 12.1%
- ROAS: 2.9x → 8.29x
- Monthly Revenue: $187,000 → $596,588
- Ad Spend: $63,580 → $43,869
Lower spend, dramatically higher revenue, and a fraction of the ACOS. This is what a structured PPC approach delivers.
Where to Start
If your ACOS is above 20%, do not try to fix everything at once. Start with these three steps this week:
- Download your search term report and add negative keywords
- Pause any keyword with more than 10 clicks and zero sales
- Separate your auto and manual campaigns if they are currently mixed
These three actions alone will show you meaningful ACOS improvement within 2 to 3 weeks.
You can also review your campaign performance directly in Amazon Seller Central for real time data.
Need Expert Help?
Managing Amazon PPC properly takes time, data, and experience. If you want to skip the trial and error and get results faster, our team at Exon Solutionz manages PPC campaigns for brands across the US, UK, EU and UAE.
We have reduced ACOS below 15% for brands in competitive categories including health, beauty, home, and electronics.
No commitment. Just honest advice about where your campaigns can improve.
Exon Solutionz is a results-driven Amazon growth agency. We have managed 100+ brands and generated $120M+ in revenue for our clients.