What is Breakeven ACoS?
Breakeven ACoSis the ACoS at which the profit you make on a sale exactly equals what you spent in advertising to acquire it. Spend less than that and each ad-driven sale is profitable; spend more and you're paying Amazon to give away product. It's the single most important number for setting realistic ACoS targets.
Breakeven ACoS Formula
For Merch by Amazon:Breakeven ACoS = (Royalties ÷ Sale Price) × 100For physical products:Unit Profit = Sale Price − COGS − Amazon FeesSet your target ACoS below this number to ensure each sale contributes profit.
Breakeven ACoS = (Unit Profit ÷ Sale Price) × 100
Why Merch by Amazon sellers need Breakeven ACoS
Merch sellers don't pay COGS or Amazon fees — Amazon does — but the trade-off is a small royalty per sale (often $1.50–$6.00 on a $15–$25 shirt). That makes Merch margins thin compared to retail, and target ACoS values that work for FBA sellers will quickly burn cash on Merch listings. Always calculate breakeven first, then aim for a target ACoS that's comfortably below it.
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