COGS calculator
Calculate cost of goods sold (COGS), your gross margin and the COGS to revenue ratio to drive the profitability of your e-commerce.
Enter your data to calculate COGS.
Value of inventory at the beginning of the period.
Total value of merchandise purchases during the period.
Value of inventory at the end of the period.
Net revenue for the period.
Enter your data and click Calculate to see your results.
Understanding COGS
COGS formula
COGS = Starting inventory + Purchases - Ending inventory. This formula isolates the value of merchandise actually sold during the period.
What to include
Include: product purchase cost, supplier shipping, customs duties, primary packaging. Exclude: marketing, office salaries, rent, bank fees.
COGS vs operating costs
COGS covers only costs directly linked to selling a product. Operating costs (OPEX) include marketing, team and infrastructure, deducted from gross margin.
Margin impact
A well-managed COGS is the foundation of healthy profitability. A good COGS/revenue ratio is between 30% and 50% in e-commerce, with a matching 50% to 70% gross margin.
Frequently asked questions
What exactly is COGS?+
COGS (Cost of Goods Sold) refers to the direct cost of merchandise sold during a period: purchase cost, manufacturing, packaging and supplier logistics.
How to calculate COGS without software?+
Use the formula: Starting inventory + Purchases - Ending inventory. You need two inventory counts (start and end of period) and the total of your supplier purchases.
What is a good COGS/revenue ratio?+
In fashion, 40-55%. In beauty, 20-35%. In electronics, 70-85%. The goal is to reduce it progressively through better supplier negotiations.
Should shipping costs be included in COGS?+
Yes for inbound shipping (supplier to you) and primary packaging. No for customer delivery, which is a separate variable cost.
What is the difference between COGS and gross margin?+
Gross margin = Revenue - COGS. COGS is the cost, gross margin is what remains after deducting COGS from revenue.
How does Fullmetrix calculate COGS automatically?+
Fullmetrix applies your product cost to every order line and consolidates COGS by period, product, category and channel for precise margins in real time.
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