Break-even ACoS is the advertising-cost percentage at which advertising uses up the remaining margin on attributed revenue. Amazon links this threshold to the available profit margin.[1] A useful calculation must therefore state which product, selling and other costs have already been deducted and use the same revenue basis as ACoS.
Suppose a hypothetical €100 of revenue excluding VAT has €70 of included costs, leaving €30 before advertising. The corresponding break-even ACoS is 30%. That only breaks even within this defined cost model. Excluded overheads, returns or additional service costs may still make the overall result negative; a lower target may be needed to retain a profit.
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