If you’re an Amazon Seller you may have tripped over some of the fun buzzwords and metrics that Amazon PPC Experts throw out during a consultation. No doubt you’re familiar with CPC, CTR, or maybe even ACos.
The latest buzzworthy metric in the community is both the silliest and possibly the most serious.
Of course, I’m speaking of TACoS.
WHAT IS AMAZON TACoS?
Total Advertising Cost of Sale, commonly referred to as TACoS is the measurement of the percent of total sales spent on advertising. This is calculated by dividing the percent of ad spend by total sales (organic & ad revenue).
It very well may be the most accurate representation of a brand’s growth or product health.
For more insight, we asked Corey Brown, Founder at buffaBRAND Marketing to explain how they are using TACos for their clients:
“In the world of Amazon PPC, we’re really working to strategically increase sales velocity for a product or brand.
One of the most efficient ways to achieve this is through Amazon Advertising’s growing list of options.
Since advertising impacts organic sales leading to organic sales volume. Of course, our goal is always to grow overall sales, so although ACoS is important, from a strategic standpoint the focus should remain on lowering your TACos”
WHAT IS A GOOD AMAZON TACoS?
Much like any other metric, success or failure is based on many factors.
Goals & Strategy
Product & Category
Price & Margin
Some agencies will claim a TACoS of 20% is great, where others can tout a number much lower. Ultimately, the only way to determine a good TACoS is by listening to your client and fully assessing the long-term strategy for the product or brand being analyzed.
If you need help assessing this metric or planning your long-term strategy we suggest setting up a consulting call with one of our PPC Experts to begin the process. We can help get you started or you can outsource your Amazon Advertising to us to focus on other areas of your business.