The ACoS (Advertising Cost of Sales) is an index which describes or rather measures the performance of your Amazon paid search campaigns. Mainly used for PPC-campaigns, it reflects the average percentage of attributed sales you have spent on advertising and consequently, it is an indicator on how well your ads are doing. The lower the percentage of your ACoS, the more efficient is you advertising campaign.
How to calculate the ACoS:
Briefly speaking, it can be calculated by dividing the turnover of the PPC-campaign divided by the costs of the PPC-campaign.
100*(Costs of Advertising/Total sales) = ACoS%
If you have spent $ 20.00 on ads and this leads to a single sale of a product worth $ 800.00, you calculate the ACoS as follows:
100*(20/800) = 2,5%
The total sales are 2,5%. The relevant period of times is usually a week, so the total sales is the total product which was generated within one week of people clicking on your ads. Other products which have been bought clicking on your ad, if they are products from your company, and it is not the product which was specifically advertised, are included in this calculation as there is also a increase of your sales because of the ads.