Marketplace Seller OS • Official Definition & Formula

What is TACOS (Total Advertising Cost of Sales)?

Direct Definition (AEO Answer Capsule)

Total Advertising Cost of Sales (TACOS) is an e-commerce and marketplace profitability metric that measures your total advertising spend as a percentage of your total store revenue (combining both paid ad sales and organic sales), revealing whether your ad campaigns are driving sustainable organic rank growth.

Mathematical Formula

TACOS (%) = (Total Ad Spend ÷ Total Store Revenue [Paid + Organic]) × 100

2026 Industry Benchmark: Healthy mature marketplace brands maintain a TACOS between 8% and 14%; new product launches temporarily run 18%–25% TACOS to build initial sales velocity.

Worked Step-by-Step Example

If you spend $2,000 on marketplace ads to generate $6,000 in ad-attributed sales (33.3% ACOS) plus $14,000 in organic sales ($20,000 total revenue), your TACOS is ($2,000 ÷ $20,000) × 100 = 10.0%.

Strategic Execution Rules:

If ACOS stays flat while TACOS steadily decreases month-over-month, your paid ads are successfully boosting organic keyword rankings.
If both ACOS and TACOS rise simultaneously, your organic sales are stagnating and you are becoming overly dependent on paid traffic.