COGS (Cost of Goods Sold)
What you paid for the product you're selling. That's the purchase price from your supplier, plus inbound freight, plus whatever packaging you use per unit. It does not include your Shopify plan, ads, or software subscriptions.
Example
You buy a shirt from your supplier for $12, pay $1.20 to get it shipped to you, and another $0.45 for the poly mailer. COGS = $13.65.
Why It Matters
If you don't know your real COGS, every pricing decision you make is a guess. Merchants who forget to include freight and packaging routinely underprice by $1-3 per unit — which adds up to thousands per month on volume. Your COGS is the foundation every margin calculation is built on.
Pro Tip
Open a spreadsheet right now and add up the supplier cost, inbound freight per unit, and packaging for your top 5 products. Compare that number to what you thought your COGS was.
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