What Are the Cost of Goods Sold (COGS)?
Cost of Goods Sold (COGS) refers to all direct costs involved in producing or fulfilling the items you sell. This includes materials, components, packaging, supplier fees, and for some sellers, production labor.
To get a quick overview of COGS, you can watch this short video:
Understanding COGS:https://youtu.be/c5POLo278Vg
Why COGS Matter
Tracking COGS is essential for several reasons:
Accurate profit calculation
Better pricing decisions
Identifying high-margin products
Budgeting and planning
Tax reporting
Cost optimization
Understanding your true cost structure helps you make data-driven decisions and maintain profitability.
How to Calculate COGS
When calculating COGS for Etsy products, include all direct costs required to create and deliver your product.
Examples of COGS components:
Materials
POD product cost
POD shipping cost
Packaging materials
Production labor (if applicable)
Example:
You sell a necklace for $50.
Materials: $10
Labor: $8
Packaging: $2
Your COGS = $20, leaving $30 in gross profit before Etsy fees, ads, and shipping.
How to Track COGS in ProfitTree
ProfitTree offers three ways to track COGS depending on your workflow.
Option 1: Automatic COGS for Printify and Printful Sellers
If you sell Printify or Printful products:
Go to the Integrations page.
Connect Printify and/or Printful.
ProfitTree automatically imports your:
product cost
shipping cost
variants and SKUs
Important Notes:
Printify/Printful override any manual COGS you enter.
Make sure you use the SKUs provided by Printify/Printful when publishing to Etsy.
To learn more about connecting your POD provider, see our Printify/Printful integration FAQ article.
Option 2: Manually Enter COGS
If you fulfill products yourself or use a non-integrated POD provider:
Go to Product Costs.
Click the pencil icon on any product.
Enter your COGS value.
Here’s a walkthrough of how to manually add COGS:
How to Enter COGS Manually:https://www.loom.com/share/e5a483e8042142988b043b20f1c408e6
Note:
If you use an unsupported POD provider (Gelato, Stadium, MyDesigns, etc.), include average or worst-case shipping costs in your COGS.
Option 3: Bulk Upload COGS (Requires SKUs)
If your listings use SKUs, you can upload costs in bulk:
Go to Product Costs.
Select Bulk Upload COGS.
Use the template to upload multiple products at once.
Here’s a full walkthrough:
Bulk Upload COGS Using SKUs:https://youtu.be/wEbi-qAiEZ8
Need help with SKUs?
Our free SKU generator can help you quickly create a consistent SKU system.