ACoS (Advertising Cost of Sales) is the most important metric in Amazon PPC management. Most new sellers have ACoS that is too high — often 50%, 60%, or higher — which means they are spending more in advertising than is sustainable for their margin. This guide gives you specific, actionable tactics to reduce ACoS on Amazon India.
Understanding Why Your ACoS Is High
High ACoS has three root causes: (1) low listing conversion rate — people click your ad but do not buy, which means you pay for clicks that don’t become sales; (2) irrelevant keyword targeting — your ads are showing for searches that don’t match your product; (3) bids that are too high for the conversion rate your listing delivers. Most high-ACoS problems trace back to conversion rate — a poorly converting listing will have high ACoS regardless of how well you optimise bids.
Fix Listing Conversion Rate First
Before touching bids, check your listing’s Unit Session Percentage in Seller Central → Reports → Business Reports. A healthy conversion rate for Amazon India is 8–15% depending on category. If yours is below 5%, your listing has a conversion problem. The most common causes: weak main image (improve photography), non-competitive price (compare to top 5 competitors), insufficient reviews (below 15 reviews hurts conversion for new buyers), or misleading title/bullets that attract clicks from customers who are not your target buyer.
Add Negative Keywords Systematically
Every week, run your Search Term Report. Filter for keywords with: 10+ clicks AND zero orders. Add all of these to your negative keyword list. This is the most direct way to reduce wasted ad spend. Common negative keyword categories: brand names you do not carry, colour/size variations your product does not come in, irrelevant use cases. Consistent weekly negative keyword addition reduces ACoS 15–25% in the first 60 days.
Reduce Bids on High-Click, Low-Conversion Keywords
In your manual campaigns, identify keywords with 20+ clicks and ACoS over 50%. Reduce their bids by 20–30%. This reduces spend on keywords that are clicking but not converting efficiently. Do not eliminate them entirely if they are generating any sales — you need some data to understand whether they convert at all.
Increase Bids on High-Performance Keywords
Identify keywords with ACoS under 15% and more than 5 sales. These are your best performers. Increase their bids by 20–30% to capture more impression share. You are leaving money on the table by not advertising more aggressively on keywords that convert efficiently.
ALI’S TAKE
When I start managing a new PPC account (through AAMS), the first two things I always do are check the listing conversion rate and add 30–50 obvious negative keywords. In 80% of cases, these two actions reduce ACoS by 20–35% within 30 days — before touching a single bid.
— Ali Lokhandwala | Amazon Seller | ₹3.5 Crore/Month Revenue
Frequently Asked Questions
What is a good ACoS for Amazon India?
Target ACoS = your product net margin minus 5–10%. If your net margin is 30%, target ACoS is 20–25%. This ensures advertising is profitable at scale. During launch (first 60 days), accept ACoS up to 40–45% as the cost of building ranking and reviews. As organic ranking builds and reviews accumulate, optimise down toward your target.
Can ACoS be too low?
Yes. An extremely low ACoS (under 5%) usually means you have been too aggressive with budget cuts and are only advertising on 1–2 very specific keywords, missing most of your market. Optimal ACoS balances profitability with adequate market coverage. If your ACoS is 8% but impressions are 500/day, raise bids to capture more volume at a still-profitable 12–15% ACoS.
✓ Is your ACoS out of control? Ali’s Amazon Advertising Management Service (AAMS) handles your entire PPC operation — campaigns, bids, negatives, reporting. Minimum ₹4L/month revenue.
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