COGS (Cost of Goods Sold)
The direct costs of producing or purchasing the products you sell.
Definition
COGS includes the cost of materials, manufacturing, shipping to your warehouse, and any direct labor involved in producing your products. It is subtracted from revenue to calculate gross profit.
Why It Matters for Shopify Brands
COGS determines your gross margin — the ceiling for all other business investments including ops. High COGS limits your ability to invest in customer service, marketing, and team. Ops improvements that reduce returns and chargebacks improve your effective gross margin.
Benchmarks
Healthy gross margins by category: fashion 50–70%, supplements 60–80%, consumer electronics 25–45%, home goods 40–60%.
Need help improving your COGS (Cost of Goods Sold)?
Opsio helps Shopify brands hit the right benchmarks — from CSAT and FCR to return rate and churn. Get your ops handled.
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