To track TACoS (Total Advertising Cost of Sale) and the impact of organic sales over time on Amazon, you should follow these key steps:
1. Calculate TACoS Regularly
- Calculate TACoS as the ratio of total ad spend to total sales (ad-attributed + organic sales) for a defined period (weekly, monthly).
- Use the formula: TACoS= Total Sales/Ad Spend ×100%, where total sales include both paid and organic sales.
2. Monitor Sales Split (Paid vs Organic)
- Track organic sales separately alongside ad-attributed sales to understand their respective contributions to total revenue.
- Growth in organic sales alongside stable or declining ad spend will show TACoS decreasing, signaling that ads are boosting long-term brand growth.
3. Use Analytics Tools and Reports
- Leverage Amazon Seller Central reports or third-party tools (e.g., Saras Pulse, Helium 10, Sellerboard) to gather accurate data on sales and ad spend.
- Use these tools to track TACoS trends across product variations, lifecycle stages, and time periods to identify patterns and optimize campaigns accordingly.
4. Assess Product Lifecycle Impact
- Track TACoS separately by product lifecycle phase (launch, growth, maturity) to avoid overspending on ads once organic sales pick up.
- Expect TACoS to be higher during launch due to ad spend investment and to decline as organic sales increase.
5. Continuously Adjust Based on TACoS Trends
- Aim for TACoS to remain flat or ideally decrease over time, which indicates growing organic sales and reduced dependency on paid ads.
- Use TACoS insights to adjust budgets to focus ad spend where it supports both immediate sales and long-term organic growth.