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COGS Calculator

Work out what a unit actually costs you, including the charges most people leave out.

What is COGS?

Cost of goods sold is what it costs you to acquire the products you sold. For ecommerce that means the supplier price plus freight, duty, brokerage and inspection, divided across the units in the shipment. It does not include ad spend, salaries or software.

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Currencies

Products

What you bought

ProductSKUQtyUnit priceLine total

Charges

What else you were charged

Freight, duty and anything else billed across the whole shipment. These are shared across your products, not charged to one of them.

Enter a quantity and a price to see your landed costs.

Most COGS numbers are wrong in the same way

Ask a store owner what a product costs and you will usually get the supplier's unit price. That number is on the invoice, it is easy to find, and it is almost always too low. The shipment also carried freight, and probably duty, and possibly inspection and brokerage on top. Those charges are real money paid to acquire the same goods, so accounting standards treat them as part of cost of goods sold. Leaving them out inflates your gross margin by whatever they came to, which for imported physical products is regularly ten to thirty percent of the goods value.

The reason people leave them out is not laziness, it is that the charges arrive as one lump for a whole shipment. A single freight bill covers forty different SKUs. There is no obvious way to say how much of it belongs to the mugs versus the kettles, so the freight bill gets filed under shipping expenses and the product cost stays at the supplier price. The margin on every product then looks better than it is, and the products that are genuinely marginal stay invisible.

This calculator does the allocation for you. Enter the lines from your supplier invoice, add each charge once, and pick how it should be shared: by line value, by units, or by weight. Value is the sensible default for duty, since duty is normally assessed on declared value. Weight is usually the honest choice for sea and air freight, because that is what the carrier actually charged on. Units make sense when everything in the box is roughly the same size.

The result is a landed cost per unit for each line, and a set of totals that reconcile exactly to the cent. That is the number to put into your accounting, your pricing model, and your profit reporting. If you also enter your sell prices, you will see the gross margin each product genuinely earns, which is frequently a less comfortable number than the one you were working from.

Common Questions

Frequently Asked Questions

What is included in COGS for an ecommerce business?

The supplier price of the goods, plus the costs of getting them to you and ready to sell: freight, import duty, customs brokerage, inspection, and any inbound handling. Payment processing fees, ad spend, salaries, rent and software are operating costs, not COGS.

How do I calculate cost per unit from a supplier invoice?

Take the line total for a product, add its fair share of the shipment-level charges, then divide by the quantity on that line. The hard part is the fair share, which is what this calculator works out for you using the allocation method you choose.

Should freight be included in COGS?

Yes. Inbound freight, the cost of getting goods from your supplier to you, is part of the cost of acquiring inventory and belongs in COGS. Outbound shipping to the customer is a fulfilment cost and is normally reported separately.

By value, by weight or by units - which allocation should I use?

Use weight for freight when your products differ a lot in size, since that is what the carrier charged on. Use value for duty, since duty is assessed on declared value. Use units when everything in the shipment is similar. If you are unsure, value is a reasonable default.

Is this the same as landed cost?

Landed cost is the whole delivered cost of a unit, and for most ecommerce businesses that is exactly what COGS should be. The terms get used interchangeably. This calculator produces both, since they are the same figure.

Do I need to sign up?

No. The calculator runs entirely in your browser and nothing is sent anywhere unless you upload an invoice or ask for the spreadsheet by email.