COGS - Cost of Goods Sold

COGS is the direct cost of the product itself. For a brand buying finished goods, COGS is the unit cost from the supplier plus the cost to get it to your warehouse (freight, duty, insurance). For a brand that manufactures, it includes materials and production labor.

COGS does not include the cost to ship it to the customer, Shopify fees, or ad spend. Those are separate line items. COGS is purely what it costs you to have the product in hand.

Accurate COGS is the foundation of every profit calculation. If you do not know your true unit cost, you cannot know your contribution margin, your break-even ROAS, or whether a SKU is actually profitable. Many brands undercount COGS by forgetting landed costs (freight and duty).