The ACoS (Advertising Cost of Sales) / Discount feature represents the advertising cost you are willing to pay to sell 1 unit. This ratio of ACoS to Discount is desirable as it helps balance profitability and advertising costs. By setting an optimal ACoS/Discount ratio, you can determine the most suitable pricing strategy for your product.
If the ACoS is set above 100%, the additional amount serves as a bonus to the buyers whereas an ACoS set below 100% will result in out-of-pocket expenses for the buyer.
Important Note: The further down you go under 100%, the lower the demand will be for the product. Although not guaranteed, generally speaking, a higher ACoS/Discount will lead to a better launch performance.
Let's Consider Some Examples:
If you have a $100 product with a 200% ACoS, it means you are willing to sell one unit for $200. The customer would receive extra for purchasing the item.
If you have that same $100 product with an 80% ACoS, it means you are willing to sell one unit for $80. The customer would then be responsible for the other 20% of the product cost.