Why Your Amazon PPC ACoS Is Too High (and How to Fix It)

Did you know 68% of Amazon sellers say their biggest frustration is high ACoS — burning cash on ads that don’t convert?

You’re not alone.

We’ve all been there: your product sells, but your ads eat up every dollar of profit.

But here’s the truth: a high ACoS isn’t inevitable — it’s a signal.

It tells you exactly where your campaign is leaking money.

And once you know how to read it, you can fix it — fast.

This guide will show you exactly why your Amazon PPC ACoS is too high and how to lower it without killing your sales.

What ACoS actually means for profitability

Let’s clear up the confusion: ACoS (Advertising Cost of Sale) is not just a number — it’s your profit thermometer.

It tells you how much you’re spending in ads to make $1 in sales.

ACoS=Ad SpendAd Sales×100ACoS=Ad SalesAd Spend×100

So, a 40% ACoS means you’re spending $0.40 to make $1.00 in ad-driven sales.

But here’s the catch — ACoS doesn’t tell you if you’re profitable.

Because it doesn’t account for your product’s actual profit margin.

According to JungleScout, 32% of sellers with “low” ACoS are still losing money — because their margins can’t support even 20% ad spend.

So, what can you do instead?

Use ACoS in context.

Ask:

• What’s my net profit per unit?

• How much can I actually afford to spend on ads?

Rule of thumb:
Your ACoS should be less than your profit margin.

If you make $5 profit on a $25 product (20% margin), your ACoS should stay under 20%.

Go above that, and you’re losing money — even if sales look good.

And if you’re not sure how your ACoS stacks up against your real margins, our team helps sellers build ad strategies that actually protect profit.

Common reasons ACoS gets out of control

You set up your campaign. You’re getting clicks. But sales are slow — and ACoS is climbing.

Why?

Most high ACoS problems come from three silent killers:

1. Poor keyword targeting
   You’re bidding on broad terms that bring in irrelevant traffic.
   Example: “blender” instead of “portable blender for travel.”

2. Weak conversion rate
   Ads bring people in — but your listing doesn’t close the deal.
   Bad images, weak bullets, or poor reviews kill conversions.

3. No negative keyword filtering
   You’re paying for clicks from shoppers who’ll never buy.
   Example: “cheap blender” or “blender repair parts.”

According to Helium 10, sellers who don’t use negative keywords waste 27% of their ad budget on irrelevant searches.

Here’s why that matters:
Even with great bids, you can’t win if you’re attracting the wrong audience.

So, what can you do instead?

Fix the foundation first.

Before tweaking bids, ask:

• Is my listing converting? (Aim for 10%+ CR)

• Am I targeting buyer-ready keywords?

• Am I blocking junk traffic with negatives?

Get these right, and your ACoS will drop — even with the same budget.

Using negative keywords to cut wasted spend

Here’s a hard truth: not all clicks are good clicks.

And Amazon will happily charge you for every one — even if the shopper was just browsing.

That’s why negative keywords are your #1 weapon against high ACoS.

They tell Amazon: “Don’t show my ad for this search.”

And according to a 2024 PayPerClick study, adding just 10 strong negative keywords can reduce ACoS by up to 35% in the first two weeks.

So, what can you do instead?

Start with this 3-step process:

1. Download your Search Term Report
   Go to Reports > Advertising > Search Term Report (last 30 days).

2. Identify irrelevant or low-converting searches
   Look for:

   • Unrelated products (“blender motor”)

   • Competitor names (“Vitamix repair”)

   • Price shoppers (“cheap,” “discount,” “used”)

   • Informational queries (“how to fix blender”)

3. Add them as negative keywords

   • Use “Negative Exact” for precise matches

   • Use “Negative Phrase” to block broader variations

Example:
You sell premium portable blenders.
Block: “cheap,” “repair,” “replacement part,” “manual,” “used,” “commercial blender”

Pro tip:
Review this report every 7–10 days. New junk terms appear constantly.

And if you’re spending hours on reports and still missing waste, our team helps sellers clean up campaigns and reclaim lost ad spend — fast.

Bid optimization strategies that work

You’ve heard it before: “Lower your bids to reduce ACoS.”

But that’s oversimplified — and dangerous.

Because if you bid too low, you lose visibility.

And no impressions means no sales.

So, what can you do instead?

Optimize bids based on performance — not guesswork.

Here’s a simple, data-driven approach:

1. Segment your keywords by performance

   • High ACOS, low sales → Pause or lower bid

   • Low ACOS, high sales → Increase bid to gain share

   • High ACOS, high spend → Add negatives, then adjust

2. Use Amazon’s bid adjustments

   • Start with dynamic bids – down only for new campaigns

   • Switch to fixed bids for stable, winning keywords

3. Adjust by placement (if budget allows)

   • Top of search: Worth paying more (up to 50% bid boost)

   • Product pages: Often cheaper, but lower intent

According to SellerLabs, sellers who adjust bids weekly see 22% lower ACoS than those who set and forget.

Real example:
A client was spending $50/day on a 60% ACoS.
We:

• Paused 12 underperforming keywords

• Added 15 negative keywords

• Increased bids on 3 converting exact-match terms

• Switched to dynamic bids – down only

Result: ACoS dropped to 38% in 10 days — sales stayed flat.

Profit doubled.

Balancing ACoS and ROAS for sustainable growth

Here’s the final truth: you can’t optimize for ACoS alone.

Because it only tells half the story.

That’s where ROAS (Return on Ad Spend) comes in:

ROAS=Ad SalesAd SpendROAS=Ad SpendAd Sales

A 20% ACoS = 5x ROAS.
A 40% ACoS = 2.5x ROAS.

But here’s why that matters:

• ACoS focuses on cost — can you afford it?

• ROAS focuses on return — is it working?

According to a 2024 Marketplace Pulse report, top-performing brands aim for ROAS of 4x+ while keeping ACoS below profit margin.

So, what can you do instead?

Use both metrics together:

Rule of thumb:

• If ACoS < profit margin and ROAS > 4x → scale

• If ACoS > profit margin → fix or pause

• If ROAS < 2x → audit keywords and listing

And if you’re juggling ACoS, ROAS, and conversion rates — we help sellers build balanced ad strategies that grow profit, not just sales.

High ACoS isn’t a dead end — it’s feedback.

It tells you where your ads are leaking money.

Fix your keyword targeting.
Use negative keywords.
Optimize bids based on data.
And balance ACoS with ROAS and real profit.

You don’t need to do everything at once — just start by reviewing your search term report today.