ACoS and ROAS describe the relationship between Sponsored Products ad spend and ad-attributed sales on amazon.ie from opposite directions. They are reciprocals: when ACoS falls, ROAS rises, provided both use the same spend and sales. Use the ACoS calculator and ROAS calculator to work with your own figures in EUR.
Neither metric tells you whether a campaign is profitable on its own. For that, you need to know how much margin the advertised products leave to cover advertising.
What do ACoS and ROAS measure?
Advertising cost of sales (ACoS) compares ad spend with sales attributed to those ads. It asks how much advertising spend it took to generate the attributed sales. ACoS is normally expressed as a percentage.
Return on ad spend (ROAS) compares ad-attributed sales with ad spend. It asks how much attributed sales revenue the campaign generated for the advertising spend. ROAS is normally expressed as a ratio.
Both use ad-attributed sales, not necessarily every sale of the product or every sale in your seller account. When comparing reports or converting a result, take ad spend and attributed sales from the same campaign and reporting period. That way, a change in either metric reflects a change in the relationship you intended to measure.
How do you convert ACoS to ROAS?
ACoS puts spend against attributed sales; ROAS puts attributed sales against spend. When the underlying spend and sales are the same and neither is zero, one is the reciprocal of the other. As attributed sales rise relative to spend, ACoS falls and ROAS rises. If spend rises relative to attributed sales, the reverse happens.
To convert by hand, treat the ACoS percentage as a fraction of one before taking its reciprocal to get the ROAS ratio. Going from ROAS to ACoS, take the reciprocal of the ROAS ratio and express the result as a percentage. For your own campaign inputs in EUR, use the ACoS calculator or ROAS calculator rather than relying on a general benchmark. If spend or attributed sales is zero, look at the underlying report instead of treating the reciprocal as a meaningful campaign result.
When is each metric more useful?
ACoS is useful when you want to compare advertising spend with the share of sales available to pay for it. It is particularly practical when setting a ceiling based on product margin: you can ask whether the campaign's ACoS leaves room for other costs and your desired profit.
ROAS is useful when you want a sales-to-spend view, or when your business already uses ROAS to discuss campaign performance. If you think in ROAS but see ACoS in the advertising console, convert the result before comparing it with your target. The metrics describe the same relationship, but their reported values are not directly interchangeable.
Neither measure includes product costs, selling fees, fulfilment costs or other expenses by itself. A campaign may look promising on either metric while the advertised products leave too little margin to support the spend. Check which products are behind the attributed sales, particularly if a campaign promotes items with different margins. For wider campaign context, see the guide to Sponsored Ads on amazon.ie.
How do you set a target from your own margin?
Start with the selling price and the costs you incur when you sell the advertised product. Account for product cost, applicable Amazon selling and fulfilment costs, and other variable costs relevant to that sale. The amount left before advertising is what can contribute to ad spend and profit. If a campaign covers products with different margins, assess the margin available on the products actually generating attributed sales rather than assuming they all perform alike.
Amazon.ie selling prices include VAT. When working out margin and comparing it with attributed sales, use the same basis for both: either both including VAT or both excluding it. Check what your advertising report includes rather than assuming how its sales are reported. The VAT calculator can help you separate VAT from a selling price when you need to make the comparison consistent.
Use the margin calculator to examine what remains after costs, then the break-even calculator to assess when advertising would use up the available margin. At break-even, nothing remains for profit from those sales after the costs you included. If you want a profit contribution, set an ACoS target that leaves room below your break-even point; the corresponding ROAS target moves in the opposite direction.
Treat the target as a decision aid, not a promise of campaign profit. Revisit it when your product mix, selling price or costs change, and compare campaign performance with the margin assumptions for the products being advertised. That is more useful than asking whether ACoS or ROAS looks good in isolation.