Do you feel like you sell a lot, but still end up with little? Then you might be missing an overview of your cost of goods. Cost of Goods Sold (COGS) is what the product actually costs you, including purchase, shipping and customs. If you gain control over this number, you gain control over profitability.
By tracking the cost of goods closely, you see what you actually earn per sale and can adjust prices, campaigns, and purchases smarter. You can prioritize products that give you higher margins, and avoid spending ad budget on products that don’t yield returns.
What is cost of goods?
Cost of goods is the real cost per product, such as:
- Purchase price
- Shipping
- Customs
Example: If you buy a product for 100, pay 20 in shipping and 10 in customs, the cost of goods is 130. This is the number you enter in the webshop to see profitability per sale.
Why enter cost of goods in the webshop?
When you enter cost of goods in WooCommerce, Shopify or via ERP integration, you can:
- Get automatically calculated gross profit and margin per sale
- Identify which products actually give you profit
- Plan campaigns based on real margins, not just revenue
- Avoid manual errors and save time
This is how you can import cost of goods automatically:
- From ERP system: Enter cost price per product in ERP, and sync to the webshop for updated prices.
- Directly in WooCommerce or Shopify: Enter cost of goods manually in admin or use built-in fields and reporting functions.
- Via plugin: Use plugins like Cost of Goods for automatic updates and reporting on margins.
Use cost of goods for smarter advertising
Many webshops use Google Shopping, Meta and Prisjakt without knowing which products are actually profitable. By adding cost of goods as an internal field in the product feed, you can:
- Filter out products with low or negative margin from campaigns
- Adjust bids based on profit, not just click price
- Combine with ROAS to see which campaigns give real profitability
If you use feed tools like DataFeedWatch, Channable or Google Merchant Center, you can add cost of goods as a field and create rules that optimize advertising based on actual margins.
Correct use of cost of goods gives you control over the bottom line, not just sales. Do you need help setting up cost of goods in your webshop and using this actively in marketing? Contact us, and we’ll help you all the way from webshop to profitable advertising.
