What does ACOS of Amazon mean?

Amazon ACoS is an advertising indicator, and sellers who advertise through Amazon should know more or less. This article will introduce ACoS in detail.

1. What is Amazon ACOS?

ACoS means a key indicator to measure the performance of users' advertising investment in Amazon market, that is, the proportion of advertising expenditure to advertising sales.

2. Amazon ACOS calculation formula

ACoS = advertising expenditure (advertising investment)/sales revenue (sales)

ACoS= (click unit price * click)/generated sales = customer unit price * sales quantity.

ACoS= (click unit price * click)/(customer unit price * sales quantity) sales quantity = conversion rate * click traffic.

ACoS= (click unit price * click)/(customer unit price * conversion rate * click traffic)

ACoS= click unit price/(customer unit price * conversion rate) =CPC/ (customer unit price *CR)

Spending is the cost of one click, and sales is the unit price and the odd number of customers. The smaller the ACoS value, the better the benefit of advertising investment.

For product promotion activities, your total sales include the product sales generated by your advertisement clicks within one week. This total sales includes not only the sales of promotional SKUs, but also the sales of other SKUs in the inventory.

For "headline search ads", the total sales include the total sales of goods generated by advertising clicks within two weeks. This total sales includes not only the sales of promotional goods, but also the sales of other goods of the same brand sold by clicking on your advertisement, regardless of whether these goods are sold by you or other sellers.

3. What is the ideal ACO?

According to different products and different purposes of sellers' advertisements, the ideal ACoS is also different.

Assuming that the seller's advertising purpose is to promote product sales and improve the natural search ranking of products, then the seller's ideal ACoS is to ensure their breakeven. However, if the seller releases a new product, he may set a higher ACoS for himself. The seller's main purpose is to catch a long-term big fish. For mature product sales, when the seller formulates the ACoS of advertising, it is natural that the ACOS is low and good, so as to ensure that the seller can make a good profit every time he sells.

4. The reason why Amazon ACOS is high

Amazon's high ACOS is mainly affected by these factors: low conversion rate, lack of diversity, invalid words and too many keywords.

(1) Big words cause waste of expenses. For example, the product of sunglasses, because of the word glasses, may have a large number of users enter your store when searching for "glasses", but when they come in, they find that it is sunglasses, and the user will close the page the next second. This huge amount has no meaning except affecting your data and consuming your funds.

(2) Diversity. A good product should fully understand the needs of users, and think of countless situations in which users are searching for products, such as sunglasses-sun protection-ultraviolet protection-men and women-color-old age-adulthood and so on.

(3) Invalid words. Decisively reduce the budget of words with poor data performance, but don't stop advertising directly. There is a weight contrast in the campaign. The longer the duration, the higher the battle score. When there is competition with other sellers, the campaign with high score will get the same display even if the price is low.

(4) There are too many keywords. The pursuit of diversity is to consider the user's usage scenarios or search habits as much as possible, but it does not mean that a search habit matches too many keywords. At this point, screening becomes very important. We can test products with several different keywords in a short time and quickly screen high conversion keywords.

Sellers can view the key index data of 14 kinds of advertisements through the ERP advertisement management section, and collect and count the data of different shops, sites and different types of advertisements with one click, thus saving a lot of operation time. Including: exposure, click, CTR, CPC, CVR, advertising expenses, advertising sales, advertising orders, commodity sales, ACoS, ACoAS, ROAS.

Integrating the advertising budget analysis function of ERP, starting from the scene, it supports the screening of advertising activities according to various conditions such as shops, advertising types, advertising combinations and advertising activities, and efficiently analyzes various data of advertising budget by using professional logic algorithms. By accumulating the data analysis results of ERP specialty, sellers can quickly screen out the advertising activities with poor performance, finely adjust the advertising bidding, timely optimize the ASIN delivery under the advertising activities, effectively reduce ACOS and reduce invalid money burning.

The main factor that can be recognized by many sellers is to have a more professional product portfolio: Jijia ERP+ industry-finance integration solution+Jijia BI, and more efficient information flow+capital flow+logistics, which can help sellers solve business problems such as products, operation, supply chain, finance and management, promote the sustainable development of enterprises in an all-round way, and realize the brand's going out to sea and goods all over the world.