Guide
Break-even ACOS for Amazon.in: the formula with GST and fees
Break-even ACOS is your profit per unit before advertising divided by the selling price. Ads with an ACOS below it make money; above it, each ad sale loses money. On Amazon.in you must take GST out of the price first.
Published 6 November 2026 · Last updated 6 November 2026 · Next review February 2027
The formula
Break-even ACOS = (Selling price − GST in the price − Amazon fees − Product cost − Other costs) ÷ Selling price
GST in the price = Selling price × GST rate ÷ (100 + GST rate)
- Selling price is what the customer pays, including GST.
- Amazon fees are the referral fee, closing fee and fulfilment (or shipping) fee for that product. Take them from your fee preview in your seller account, because they change by category, price band and size.
- Product cost is your landed cost per unit, excluding any GST you can claim back as input credit.
- Other costs cover packaging, inbound shipping to the warehouse and an allowance for returns.
- If you can't claim back the 18% GST charged on ad spend, divide the result by 1.18.
Calculate yours
Often 5%, 12% or 18% — check your HSN code
Referral + closing + fulfilment, from your fee preview
Landed cost, excluding GST you can claim back
Packaging, inbound shipping, returns allowance
Your break-even ACOS
26.9%
Ads with ACOS below this make a profit on each sale; above it, each ad sale loses money.
- GST in the price
- ₹137.14
- Price excluding GST
- ₹761.86
- Profit per unit before ads
- ₹241.86
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Three worked examples
Illustrative numbers for typical home and kitchen products. Use your own fee preview and costs.
| Product | Price (₹, incl. GST) | GST rate | GST in price (₹) | Fees (₹) | Cost + other (₹) | Profit before ads (₹) | Break-even ACOS |
|---|---|---|---|---|---|---|---|
| Steel water bottle | 899 | 18% | 137.14 | 180 | 340 | 241.86 | 26.9% |
| Kitchen towel set | 449 | 12% | 48.11 | 110 | 165 | 125.89 | 28.0% |
| Bamboo cutting board set | 1,249 | 12% | 133.82 | 260 | 545 | 310.18 | 24.8% |
The cheapest product has the highest break-even ACOS here because its costs are a smaller share of the price. That's why one target ACOS for a whole account is usually wrong.
How to use break-even ACOS
- Calculate break-even ACOS for each product you advertise.
- Set a target ACOS a few points below it — for example 22% for a 27% break-even — to leave room for returns and price drops.
- Lower bids on keywords and targets that run above the target over at least 10 clicks; raise them where ACOS is well below it.
- Recalculate whenever price, fees or product cost changes, and before sale events when you discount.
- Watch TACOS too: if ad spend rises but total sales don't, ads are taking credit for sales you'd have had anyway.
Frequently asked questions
- What is break-even ACOS?
- Break-even ACOS is the advertising cost of sales (ACOS) at which an ad sale makes zero profit. It equals your profit per unit before advertising divided by the selling price. Below it, ads are profitable; above it, every ad sale loses money.
- How do I calculate break-even ACOS on Amazon.in?
- Take the selling price including GST, subtract the GST in that price, Amazon's fees, your product cost and other per-unit costs. Divide what is left by the selling price. For a ₹899 product with 18% GST, ₹180 fees, ₹320 cost and ₹20 other costs, break-even ACOS is 26.9%.
- Why does GST matter for ACOS in India?
- Part of every rupee a customer pays is GST you pass to the government, so it is not profit. Ignoring it overstates break-even ACOS by the GST share of the price — about 15 percentage points of the price at 18% GST.
- What is a good ACOS for Amazon India?
- A good ACOS is one below your own break-even ACOS. A product with a 27% break-even ACOS is profitable at 20% ACOS, while a product with a 15% break-even loses money at the same 20%. Set a target ACOS per product, not one number for the whole account.
- What is the difference between ACOS and TACOS?
- ACOS is ad spend divided by sales from ads. TACOS (total ACOS) is ad spend divided by all sales, including organic. TACOS shows whether advertising is growing your whole business or just buying the sales you would have had anyway.
- Should I ever run ads above break-even ACOS?
- Sometimes, on purpose and for a limited time: when launching a product to earn reviews and ranking, or to defend your brand name. Set an end date and a spend cap, and track TACOS to confirm organic sales grow.
Related: Amazon PPC software for Indian sellers · Amazon advertising glossary
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