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AnalyticsCOGS

Cost of Goods Sold(COGS)

COGS (Cost of Goods Sold) is the direct cost of producing or acquiring a unit of a product — typically the wholesale price for resellers, or raw material plus labour for manufacturers — used to calculate gross margin and profit-based bidding metrics.

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Definition

For a reseller, COGS is the price paid to the supplier per unit. For a manufacturer, COGS is raw materials plus direct labour plus packaging. COGS does not include overheads (rent, salaries, marketing) or returns — those belong in a fuller P&L calculation. Gross margin = (selling price − COGS) / selling price; gross profit = selling price − COGS.

Most e-commerce platforms store COGS but do not expose it consistently. Shopify has cost_per_item on the variant level. WooCommerce uses a _wc_cog_cost meta key from the Cost of Goods plugin. PrestaShop has wholesale_price on ps_product. Magento has cost on catalog_product_entity. OpenCart has product_supplier.price. Shopware uses purchase_price. Each platform names it differently and stores it in a different place.

FeedArc imports COGS automatically from all six platforms via the dedicated cost field on each one, then propagates it to every downstream calculation: per-product margin, per-campaign POAS, custom-label bidding tiers, and dashboard profitability reports. The 6-platform auto-COGS is what makes profit-based bidding actually feasible for SMBs that do not have a finance team manually entering wholesale costs.

Limitations & caveats

Where the concept above breaks down or needs careful application — written honestly so you can make better decisions.

  • Cost-per-item stored on a variant is a point-in-time snapshot, not a moving average. For products whose supplier cost changes mid-quarter (raw-material volatility, FX swings), the COGS used in feed-driven POAS calculations will lag reality until the variant is updated — re-import cadence matters.
  • Bundles, kits, and made-to-order products break naive per-variant COGS — the kit-level cost is the sum of component costs, not a single field. Plain Shopify/WooCommerce cost_per_item fields do NOT auto-aggregate; without bundle-aware COGS logic, POAS on bundles is unreliable.
  • COGS captured at the platform level typically excludes payment-processing fees, return reserves, and ad-spend allocation. For unit-economics decisions, treat platform COGS as the floor — true contribution margin requires the fuller picture FeedArc layers on top.

Frequently asked questions

Related terms

Profit On Ad Spend(POAS)

POAS (Profit On Ad Spend) measures the gross profit generated per unit of ad spend — (revenue minus cost of goods minus ad spend) divided by ad spend — instead of the gross revenue measured by ROAS.

Custom labels (GA4 segmentation)

Custom labels 0 through 4 are five free-text fields in Google Shopping feeds used to segment products for bidding — typically populated from Google Analytics 4 performance data so high-revenue products can be bid on differently from low-revenue ones.

Product feed

A product feed is a structured file (XML, CSV, TSV, or JSON) that lists every product in your catalog with the fields advertising and marketplace platforms need to display them.

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