E-commerce Direct

E-commerce Direct is a bespoke e-commerce agency located in the heart of London within easy access to Southampton docks. We provide a variety of support services for Amazon, eBay and Shopify sellers.
Although we are not nearly as large as Amazon... or even close for that matter... our team is well experienced in helping clients save on costs and substantially increase sales.
Phone UK +44 (0) 208 004 7769
Phone US ++1 (714) 782 7826

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Amazon ACoS vs RoAS What Do They Mean and How Do They Help Me Sell

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Amazon ACoS vs RoAS What Do They Mean and How Do They Help Me Sell

Understanding Amazon’s metrics are a must for any Amazon Seller who’s looking to maximise sales while curbing advertising spend.

Are you an Amazon Seller looking to improve sales while keeping a tight rein on your advertising spend?  Amazon provides a variety of metrics to help you better understand what advertising medium, e.g. Sponsored Product Ads, Display Ads (vendors only), or Sponsored Brand Ads give you the best value for your advertising spend.

There are two metrics you’ll want to take notice:

There are two metrics you’ll want to take notice:

Advertising Cost of Sales (ACoS)
Equation: Ad spend  Ad revenue x 100

Return on Ad Spend (RoAS)
Equation: Ad revenue  Ad spend

The Advertising Cost of Sales (ACoS) is a popular Amazon metric that show the ratio of direct advertising spend that directly triggered sales.

Let’s look at an example.  You spend £1,000 on Sponsored Brand Ads for your product and those ads generated £5,000 in sales, your ACoS would be 20%.

Many Amazon Sellers put high value in the ACoS metric.  However, like with all advertising don’t rely on just one metric.  Use a variety and clearly understand a low ACoS is not necessarily your ideal goal.  For example, assuming your sales margins are adequate, wouldn’t you rather have 500 sales at a 20% ACoS versus 75 sales at a 10% ACoS?  Always ensure you look at the big picture.  Understand your products’ specific gross margin (i.e. revenue – cost of goods) and don’t forget to include all your overhead costs, e.g. administrative cost, storage, handling, etc., into your calculations.

Return on Ad Spend (RoAS) is a far more common metric used among marketers, advertisers and especially those working in paid search like Google Ads and digital marketers using social media advertising campaigns.

RoAS helps you evaluate the overall effectiveness of your Amazon Sponsored Ads campaign, Ad Group, product or targeting strategy.

RoAS is simply calculated by dividing your total sales generated by your advertising spend for any given campaign.  For example, if you spend £200 on a Sponsored Ad campaign that realises £1,000 in sales, the RoAS will be 5.  RoAS is represented as a number that is interpreted as an index (aka multiplier) rather than a percent (%) like with ACoS calculations.

RoAS simply shows us how efficient your advertising investment is at driving attributed sales.  As your advertising campaigns’ ROAS increases, your campaign becomes more efficient.

Both ACoS and RoAS is available in your campaign and through downloading reports in the Amazon advertising portal.  Always keep in mind with Amazon Sponsored Brand Ads, metrics can take up to 12 hours to populate and 48 hours for Sponsored Product Ads.

About E-commerce Direct Ltd

E-commerce Direct Ltd is a bespoke advertising, marketing and sales growth agency, supporting businesses using e-commerce sales platforms such as Amazon, eBay, Google, Shopify, WooCommerce and many other local and regional sales marketplaces, helping to increase their online brand awareness and product sales.

The company generates millions in annual sales revenue for its clients who span from individual sellers to Fortune 500 and FTSE100 companies.

E-commerce Direct is a talented and experienced team, made up of individuals who specialise in distinct disciplines including; advertising, e-commerce sales, language translations, public relations, research, social media, website development and programming.

The company is headquartered in London, England with additional operations in the European Union, Australia, Asia and the Americas.

E-commerce Direct can be reached via email on info@e-commercedirect.com, live chat on its website www.e-commercedirect.com and via phone in the UK +44 (0) 208-004-7769 and ++1 (714) 782-7826 in the USA.

About SMBE Direct Ltd

E-commerce Direct is a subsidiary of SMBE Direct, a world reaching B2B and B2C business services conglomerate, giving rise to exceptionally talented and well-experienced professionals organised into business units, that provide direct services to SMEs and enterprise level businesses, whereby increasing their brand awareness and sales.

SMBE Direct can be reached via email on info@SMBEdirect.com, through its website www.SMBEdirect.com and via phone in the UK +44 (0) 208 004 4545.

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