Reducing ACOS (Advertising Cost of Sale) is one of the most important goals for e-commerce brands that rely on paid advertising to drive sales. High ACOS means you are spending too much on ads compared to what you earn, which can cut into profits and make scaling difficult. The secret to lowering ACOS is not just better advertising—it also involves optimising your e-commerce fulfilment, product listings, pricing, and operations. When your fulfilment process is strong, customers receive orders faster, leave better reviews, and increase your conversion rate, all of which directly reduce ACOS.
In this blog, we explore practical strategies to reduce ACOS through improved fulfilment operations, smarter advertising, and better optimisation across your entire e-commerce workflow.
Understanding ACOS and Why It Matters
ACOS is a key metric used in platforms like Amazon Ads, Walmart Ads, and other marketplaces. It is calculated as:
ACOS = (Ad Spend ÷ Ad Revenue) × 100
A lower ACOS means your ads are more efficient and generate more revenue relative to the cost. A higher ACOS indicates that your ads are underperforming, either due to low conversion, poor keyword targeting, or operational issues like slow fulfilment and high return rates.
How E-Commerce Fulfilment Impacts ACOS
Most sellers focus only on bidding strategies or keywords when trying to lower ACOS, but your fulfilment performance has a huge influence on ad efficiency. Poor fulfilment leads to:
Lower conversion rate
Lower product ranking
Higher return rate
Poor customer reviews
Delayed delivery tags on listings
Reduced Buy Box eligibility
These issues reduce your conversions, meaning you need to spend more on ads to get the same number of sales. That pushes ACOS up.
Improving fulfilment increases customer satisfaction, boosts conversions, and raises listing quality—all of which reduce ACOS.
Top Strategies to Reduce ACOS for E-Commerce Fulfilment
1. Improve Delivery Speed and Accuracy
Fast delivery is now an expectation in e-commerce. Customers prefer products that arrive quickly and reliably. Slow fulfilment lowers conversion rates, forcing you to spend more on ads to compensate.
How to improve delivery speed:
Use distributed warehousing to store inventory closer to customers
Leverage a reliable 3PL fulfilment partner
Use automated systems for order processing
Improve packaging and picking accuracy
Faster delivery gives your listings “fast delivery” tags, which increases clicks and conversions—reducing ACOS.
2. Maintain Healthy Inventory Levels
Stockouts can destroy your ACOS. When your item runs out of stock, your ads stop converting, but you may still be charged for clicks. After restocking, your listing may lose ranking, increasing advertising costs.
To avoid this:
Use real-time inventory tracking
Implement demand forecasting
Keep safety stock
Work with fulfilment partners who send inventory alerts
Healthy stock levels ensure that your ads always drive conversions, lowering your ACOS.
3. Improve Product Listings for Higher Conversion
Well-optimised listings convert more customers from each ad click, reducing ACOS naturally.
Optimise your listings with:
High-quality images
Clear product titles
SEO-driven descriptions
Bullet points that highlight benefits
Accurate specifications
Strong keywords
Highlight e-commerce fulfilment features such as fast delivery, easy returns, and local warehousing. These increase customer trust.
Higher conversion = lower ACOS.
4. Use Keyword Optimisation and Negative Keywords
Many brands waste ad spend on irrelevant keywords. This increases clicks but not sales, pushing ACOS higher.
To fix this:
Conduct keyword research
Use negative keywords to filter irrelevant traffic
Pause low-performing keywords
Bid higher on high-converting terms
Test long-tail keywords
Smarter targeting leads to better ROI and reduces ACOS immediately.
5. Reduce Return Rates Through Better Fulfilment
Returns cost money and affect ACOS indirectly: when customers return products, your true profit shrinks, making ACOS look worse.
Reduce returns by:
Improving packaging
Ensuring accurate product descriptions
Offering reliable order tracking
Using quality checks during fulfilment
Lower returns lead to healthier margins and reduced ACOS.
6. Improve Customer Reviews and Seller Ratings
A poor rating reduces click-through rate (CTR) and conversion rate. A strong rating improves both, which reduces ACOS.
Improve ratings by:
Reliable fulfilment
Faster shipping
Proactive customer support
Automated review requests
Customers trust listings with strong ratings, which lowers your advertising cost per sale.
7. Use Smart Pricing Strategies
Pricing directly affects conversion rate. Even the best ads cannot convert if the price is too high compared to competitors.
Optimise pricing with:
Competitive pricing tools
Bundle offers
Seasonal discounts
Inventory-based pricing
Better pricing increases conversions and decreases ACOS.
8. Automate Order Processing
Manual fulfilment is slow and error-prone. Automation reduces fulfilment issues and speeds up delivery.
Use tools that automate:
Order routing
Picking and packing
Shipping label generation
Inventory syncing
Automation improves fulfilment efficiency, increases conversions, and supports lower ACOS.
9. Use a 3PL to Enhance Fulfilment Efficiency
A professional 3PL (third-party logistics) provider helps reduce ACOS by improving overall fulfilment performance. A good 3PL provides:
Fast deliveries
Optimised warehousing
Real-time tracking
Inventory forecasting
Accurate order processing
With better fulfilment, your ads convert more efficiently and cost less per sale.
10. Monitor ACOS and Optimise Regularly
ACOS should be reviewed frequently. Small improvements in fulfilment or listing quality can cause big changes.
Monitor:
Keyword performance
Click-through rate
Conversion rate
Delivery speed
Return rate
Inventory levels
A data-driven approach helps maintain a healthy ACOS over time.
Final Thoughts
Lowering ACOS for e-commerce fulfilment is not about cutting ad spend—it is about improving every stage of your selling process. From fast delivery and strong inventory management to optimised product listings and smart keyword targeting, each improvement boosts your conversion rate and reduces ad costs.
By enhancing fulfilment operations, you build trust with customers, rank better on marketplaces, and make every advertising dollar more effective. This leads to lower ACOS, higher profit margins, and long-term business growth.
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