Calculate your target ACOS
Break-even tells you where you start losing money. It does not tell you what you want to earn. Enter your book's numbers and the margin you want to keep — out comes the ACOS your campaign has to hit for anything to be left over.
Where the target ACOS comes from
First the ceiling, above which advertising costs more than the book brings in. It depends on the book alone:
Break-even ACOS = royalty rate ÷ (1 + tax) − printing cost ÷ list priceIf you want to keep part of the royalty, advertising may only use up the rest:
Target ACOS = break-even ACOS × (1 − margin)What the margin changes
A paperback at $12.99 with a 60 % royalty and $2.50 printing cost. The royalty is $5.29 and break-even sits at 40.8 %:
| Margin kept | Target ACOS | You keep per sale |
|---|---|---|
| 0 % | 40.8 % | $0.00 |
| 20 % | 32.6 % | $1.06 |
| 30 % | 28.5 % | $1.59 |
| 50 % | 20.4 % | $2.65 |
The relationship is linear: every percentage point of margin lowers the target ACOS by one percent of break-even. Keep half, and you have to halve the ACOS.
Common questions
- What is the difference between break-even ACOS and target ACOS?
- The break-even ACOS is the ceiling: at that point ad spend and royalties cancel out and you work for nothing. The target ACOS sits below it and leaves you a defined share of the royalty.
- How high should my margin be?
- That is a business decision, not a calculation. 30 % is a common starting point. For a new title that needs visibility and reviews a smaller margin can make sense — then it is a deliberate investment rather than an oversight.
- Why is my target ACOS lower than the ACOS Amazon shows me?
- Because Amazon Ads attributes a sale to the day of the click and keeps adding conversions afterwards. Recent numbers therefore look worse than they end up being. Judge the ACOS only once enough clicks have accumulated.
- Does the target ACOS use the net or the gross price?
- Both, in the right places. The royalty is calculated on the net price, the way KDP pays it. ACOS and ROAS refer to gross revenue at list price, the way Amazon Ads reports it.