What target COS should I set?
The right target COS depends on several factors, most importantly:
Campaign objectives – e.g. revenue growth, profitability, or acquiring new customers.
Average product margin – a higher margin allows a higher COS, a lower margin requires a lower COS for the campaign to stay profitable.
Every store has different needs, so it's important to set the COS to match your specific business goals and financial parameters.
How to work out your COS
The main guide is your margin. Your target COS shouldn't exceed your gross product margin — at that point the ads earn back exactly what they cost and nothing more. Here's how to work it out:
Calculate your real margin. From the selling price, subtract the purchase price, shipping, packaging, payment fees and returns. Not the margin on paper, but what actually stays with you from an order.
Subtract the profit you want to keep. Example: your real margin is 40% and you want to keep 15% → that leaves 25% for ads plus our fee.
Match it to your goal. Want revenue growth and have room to invest? Move your COS closer to your margin. Want profit right now? Keep it well below.
Factor in repeat purchases. If your customers buy repeatedly, you can afford a higher COS on the first purchase — it pays off on later orders.
⚠️ Your target COS does not include our service fee. The value you set in the app covers ad spend only — our fee is not part of it. So if you want your total cost including our fee to be, say, 20%, you need to set your target COS lower — with a 5% fee, that means 15%.
💡 Change it in small steps. Move the COS by 1–2% and give the campaign at least 14 days to stabilise before you judge the result. A sudden drop stalls the campaign and makes the data hard to read.
📧 To set your exact target COS, contact your Tanganica account manager.