How to Lower TACoS & Boost Amazon Profits

If your Total Advertising Cost of Sales (TACoS) is too high, it’s a clear sign that your ads aren’t working as efficiently as they should. Lowering TACoS means increasing profitability by improving the relationship between your organic sales and advertising spend—without cutting back on essential growth.

Here’s how to strategically reduce TACoS while maintaining strong sales momentum.

1. Improve Retail Readiness Before Spending on Ads

Key Question: Is your product optimized for conversions?

Before spending more on ads, ensure your listing is retail-ready so that every visitor has the highest chance of converting. This includes:

• Compelling Product Titles & Bullet Points – Clearly communicate benefits & keywords.

• High-Quality Images & A+ Content – Show value visually.

• Competitive Pricing – Don’t overprice yourself out of the market.

• At Least 15-20 Reviews – Social proof builds trust.

💡 Action Tip: If your conversion rate (CVR) is low (<10%), fix these first. Otherwise, your ad spend will just burn cash.

2. Focus on High-Intent Keywords (Not Just High-Traffic Keywords)

Not all keywords are equal. Many sellers waste money on broad, high-search-volume keywords that don’t convert. Instead, shift your strategy toward:

• Long-tail keywords – These have lower competition but higher purchase intent.

• Branded keywords – If customers already search for your brand, these will yield a lower TACoS.

• Competitor ASIN targeting – Ads placed on lower-ranked competitors’ listings can drive conversions at a lower cost.

📊 Action Tip: Regularly analyze your Search Term Report in Amazon Ads to identify wasteful, high-cost terms. Pause or refine them.

3. Increase Organic Ranking to Depend Less on Ads

A high TACoS often means you’re too dependent on ads for sales. Your goal is to increase organic sales, so your paid ads contribute to a smaller portion of your total revenue.

Here’s how:

• 🚀 Use PPC to boost ranking, then scale back – Bid aggressively on high-converting keywords, then reduce bids once your organic rank improves.

• 🔍 Optimize your backend search terms – Amazon indexes these, so optimize for hidden keywords.

• 🌍 Leverage external traffic – Driving traffic from Google, social media, or influencers can help boost organic rankings.

📈 Action Tip: Track your organic ranking for key terms. If you start ranking in the top 10, gradually reduce PPC bids to maintain profitability.

4. Use a Smarter Ad Budget Allocation

If you’re running ads without clear objectives, you’re likely over-spending. Shift your ad spend strategically:

• Prioritize Sponsored Products – These drive the majority of conversions (~75-80% of ad spend should go here).

• Optimize Placement Adjustments – Higher bids for Top of Search can yield better conversion rates.

• Refine Bids with Dayparting – Reduce bids during low-conversion hours (if applicable).

⚡ Action Tip: Use Amazon’s Placement Reports to see where you’re overspending on ineffective placements. Adjust bids accordingly.

5. Scale Efficiently Without Sacrificing Profitability

Once you’ve optimized your ads, the final step is scaling profitably without TACoS creeping back up.

• Test New Ad Types Carefully – DSP or Sponsored Display can be great, but don’t overspend before validating results.

• Improve Lifetime Value (LTV) – If you sell replenishable products, consider Amazon’s Subscribe & Save to increase retention.

• Leverage Retargeting – Target past visitors who didn’t convert the first time.

⏳ Action Tip: Track TACoS trends over time. A temporary TACoS increase can be OK if it leads to better organic ranking and long-term profitability.

Final Thoughts: A Low TACoS is a Sign of a Profitable Business

The goal of Amazon PPC isn’t just to drive sales—it’s to drive profitable sales. Lowering TACoS means your business is becoming less reliant on ads and more sustainable.

👉 Focus on conversion optimization, keyword efficiency, organic ranking, and smart scaling. If done right, your TACoS will drop while your total revenue grows.

Want expert help with your Amazon Ads strategy? Let’s chat. 🚀