Measuring TACoS: The Amazon Metric That Drives Growth - #254

**Samuel** (0:00)
In this episode, we'll break down tacos or total advertising, cost of sales, what it means, how it differs from ACOS, and why experienced Amazon sellers use it to make smarter advertising decisions. We'll also explore what a healthy tacos looks like at different stages of your business, practical strategies to improve it, and how to track your performance over time. Check it out.
Welcome to the next Amazon Top Seller Podcast. Stay updated with the latest Amazon news and learn the nitty gritty of selling on Amazon through BQool's years of expertise in the Amazon world. I'm Samuel, and I'm the host of this podcast brought to you by the fantastic Amazon experts at BQool. Let's start our journey to become the next Amazon Top Seller.
What is tacos? No, not the food. In Amazon advertising, tacos stands for total advertising cost of sales, and it's one of the most important metrics sellers use to measure long-term growth. If you're selling products on Amazon and running ads to boost your product listings, tacos is the metric you should really be looking at, and we'll show you why in this episode. What does tacos mean on Amazon? Tacos stands for total advertising cost of sales. It tells you how much money you spend on ads compared to your total sales. Understanding how your ad spend affects your overall business gives you a bigger picture view of performance and makes it easier to evaluate not only how well your ads are performing, but also how well they are helping grow your business.
Tacos is calculated using a simple formula. Total advertising cost of sales, or tacos, equals ad spend divided by total revenue, then multiplied by 100 In other words, you take how much you spend on advertising, divide it by your total revenue from both ads and organic sales and then convert it into a percentage. This percentage shows how much of your total business revenue is being used to pay for advertising. What's the difference between tacos and ACOS? The main difference is that ACOS only looks at sales made from ads, while tacos looks at all sales, including both ad sales and organic sales. This helps you understand not just how well your ads are working, but also how your overall business is growing. ACOS stands for advertising cost of sales, and it shows how much you spend on ads compared to the sales that were made from those ads. ACOS equals ad spend divided by ad revenue, then multiplied by 100 Let's look at an example. If you spent $50 on ads and generated $200 in sales from those ads, your ACOS would be 25%.
This is calculated by dividing 50 by 200, then multiplying by 100 Now, let's look at tacos. If your total revenue, including both paid and organic sales, is $500, then your tacos would be 10%.
This is calculated by dividing 50 by 500, then multiplying by 100 This example shows how ACOS focuses only on ad generated sales, while tacos reflects the impact of advertising on your entire business. So even though your ads cost 25% of your ad generated sales, they only made up 10% of your total sales. After looking at the tacos value, the ad spend may seem more reasonable than it did when only looking at ACOS. This is why it's important to track both metrics together. ACOS helps you understand how your ads are performing, while tacos helps you see how your ads support your overall business growth. So how does tacos affect your business? Tacos affects your business by showing whether your ads are helping your business grow over time. A healthy tacos can mean your ads are increasing sales, improving product rankings, and helping more shoppers find your products naturally on Amazon. As organic sales grow, you may rely less on ads, which can help lower tacos over time. And what's an appropriate tacos at different selling stages? A good tacos can change depending on how new or popular your product is. New products usually need more ads, while older products with strong sales often need fewer ads. There is no perfect tacos for every seller, but here are some general benchmarks if you need it. Tacos, or total advertising cost of sales, varies depending on the stage of your product. For new products, a tacos of around 15 to 25 percent or higher is common. At this stage, you're investing more in advertising to gain visibility and generate initial sales. As your product starts to grow, a tacos between 10 and 20 percent is typical. This usually means your organic sales are beginning to increase, reducing your reliance on paid ads. For mature products, a tacos of 5 to 10 percent is often considered healthy.