The conversion
ROAS = 100 ÷ ACOS, and ACOS = 100 ÷ ROAS. One division, either direction.
Spend $3,140 to generate $11,900 in ad-attributed sales:
- ACOS = (3,140 ÷ 11,900) × 100 = 26.4%
- ROAS = 11,900 ÷ 3,140 = 3.79x
- Check: 100 ÷ 26.4 = 3.79x
Using the converter
Type an ACOS and it converts to ROAS. To run it backwards, set the ACOS box to 0 and type a ROAS in the second box — the converter reads direction from whichever box holds a value, and ACOS wins when both do. Clunky, I know. It is the only way to fit two directions into one column of inputs.
Which number to manage
ACOS, usually, because ACOS is the one you can hold directly against your margin.
A 3.79x ROAS reads as a win until you notice it means 26.4% of revenue going to ads on a product with an 18% margin, which loses 8.4 cents on every ad-attributed dollar before overhead. The same 3.79x on a 60% margin product is comfortable. The ratio carries no verdict of its own; the margin supplies it.
Conversions worth keeping
| ACOS | ROAS | |
|---|---|---|
| 5% | 20.00x | Brand terms, near-zero competition |
| 10% | 10.00x | Exact match, very efficient |
| 15% | 6.67x | Strong in most categories |
| 20% | 5.00x | Common Sponsored Products target |
| 25% | 4.00x | The number Amazon sellers quote most |
| 33.3% | 3.00x | Needs a fat margin to work |
| 40% | 2.50x | Thin — check margin first |
| 50% | 2.00x | Break-even at 50% margin |
| 100% | 1.00x | Every sales dollar goes to ads |
Where the conversion stops working
ACOS and ROAS only convert cleanly when both come off the same revenue figure and the same attribution window. Amazon reports on a 7-day or a 14-day click window depending on the report; take ACOS from one and ROAS from the other and the division still returns a number, just not one worth acting on.
TACOS is the other exception. Total advertising cost of sale swaps ad-attributed revenue for total revenue, organic included, so it answers a different question — what share of the whole business goes to ads. No plain ROAS converts to it.
For the target to aim at, target ROAS takes your margin and returns the minimum ROAS and ACOS your ads have to clear. ACOS works from raw spend and revenue, blended ROAS folds organic revenue in, and ACOS vs ROAS covers where the two metrics disagree.