Eva Answers / PPC and advertising

Why Does My ACoS Keep Rising When My Amazon Agency Charges a Percentage of Sales?

Answered by Hai Mag, Founder & CEO, Eva Commerce, with 20+ years in eCommerce transformation, marketplace optimization, and AI-driven automation.

Last reviewed: November 2, 2026

Short answer: ACoS usually rises for a reason you can find in your own Amazon Ads reports: higher costs per click from bidding strategy or placement changes, budget moved into broad or new campaigns, lower conversion from listing, price or stock problems, or a planned push for sales. A fee tied to sales can reward revenue growth even when ad efficiency falls, so check the incentive, but diagnose the cause before you switch. Judge ACoS against your break-even ACoS, which Amazon ties to your profit margin.

Where rising ACoS usually comes from

ACoS is ad spend divided by ad sales. It rises when cost per click goes up, when clicks convert less often, or when more budget goes to campaigns that were never meant to be efficient. Each cause leaves a trace in Amazon Ads reports you can pull yourself.

What you see	Where to look	What it usually means
Cost per click up, conversion rate flat	Campaign bidding strategy and placement bid adjustments	Bids were raised. Dynamic bids (up and down) can raise a bid by up to 100%, so a $1.00 bid can reach $2.00, and placement adjustments can add up to 900% on top of search, rest of search or product pages.
More clicks, same orders	Search term and targeting reports	Spend moved to broad or loosely related searches that do not convert.
Conversion rate down across campaigns	Detail page, price, reviews and stock	A listing or offer problem, not an ads problem. More ad spend will not fix it.
ACoS high on new campaigns only	Campaign start dates	Expected. Amazon notes that new campaigns tend to have a high ACoS simply because they are new.
Sales up and ACoS up together	Spend by campaign and by product vs margin	A deliberate push for revenue or rank. Fine if it is planned and stays under break-even ACoS; a problem if no one agreed to it.

How the fee model fits in

Amazon says each partner sets its own pricing and lists project fees, flat monthly fees, ad spend and sales-based commissions and custom packages as common models (Amazon Ads partner guide). It also tells advertisers to consider how partner fees factor into total return on ad spend. A fee tied to sales or spend is not wrong, but it means the agency earns more when revenue or spend grows, even if ad efficiency falls. That is why the target should be agreed in profit terms, so both sides look at the same number.

How to diagnose it before you switch

Work out break-even ACoS per product. It equals your profit margin before advertising. Any product running above it loses money on ads.
Pull 90 days of campaign and placement data. Compare cost per click, conversion rate and spend share month by month.
Check what changed in settings. Look for bidding strategy switches to dynamic up and down, new placement adjustments and budget moves into new or broad campaigns.
Read the search term report. Find terms with spend and no orders, and check whether they were negated.
Rule out listing and stock problems. Falling conversion, a lost Featured Offer or low stock push ACoS up no matter who manages the ads.
Ask the agency for a written explanation and a profit target. A good answer names the cause, the fix and the date you will see it.
Then decide. If the cause is fixable, agree the target and review in a quarter. If not, plan the move with how to switch Amazon agencies.

Exceptions

Launches and ranking pushes. Spending above break-even on purpose to build rank for a new product can be right, if it is planned, time-limited and agreed.
Seasonal competition. Costs per click rise when more advertisers bid on the same searches, so compare with the same period last year where you can.
ACoS is one KPI. Amazon recommends looking at impressions, conversion rate, click-through rate and return on investment too. A higher ACoS with more new customers or better organic rank may still be worth it.

How Eva handles this

Eva’s Amazon PPC management re-evaluates bids every hour against conversion signals, ranking position and inventory status, classifies every ASIN by ranking stage (launch, defense or harvest) so budget follows that stage, harvests converting search terms from Search Query Performance data and negates irrelevant ones, and pulls spend back on low-stock ASINs. Profit control is margin-aware by ASIN rather than a single ACoS target. A free PPC audit reviews your current Sponsored Ads setup, maps waste and opportunity and classifies your ASINs by ranking stage.

Follow-up questions

What is a good ACoS on Amazon?

Amazon says there is no definitive number for a good ACoS. It depends on your margins, category and goals. The floor is your break-even ACoS: to stay profitable on ads, ACoS needs to be lower than your profit margin before advertising.

Is a percentage-of-sales agency fee a red flag?

Not on its own. Amazon lists ad spend and sales-based commissions next to flat monthly and project fees as common partner pricing models. What matters is that targets are written in profit terms, such as break-even ACoS by product, and that you can see the campaigns, search terms and reports yourself.

Should I switch agencies if ACoS rises for one month?

Usually not on one month. New campaigns, launches and seasonal competition raise ACoS for normal reasons. Diagnose the cause in your own reports, ask for a written explanation, and judge over a quarter against a dated baseline. If you do switch, keep every account in your name and move access in the right order.

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