True cost-of-goods-sold per unit including all variable inputs.
Inputs (per unit)
Raw goods cost
Per-unit assembly cost
Allocated factory overhead
Box, inserts, branded materials
Factory to warehouse
If applicable
Inspection cost per unit
Misc per-unit cost
For margin calc
For monthly totals
Results
COGS per unit—
Gross margin %
—
Gross margin $
—
Monthly COGS
—
Cost breakdown
Component
Per Unit
% of COGS
Monthly
About this calculator
COGS is the foundation of every margin and pricing decision. Get it wrong and every downstream calculation — gross margin, contribution margin, breakeven, target ROAS — is wrong. Yet most operators carry an outdated COGS number in their head, sometimes off by 20-30% from reality.
The discipline is summing every cost that gets a product to the warehouse and ready to ship. Materials, labor, manufacturing overhead, packaging that travels with the product, inbound freight, import duties, quality control. Each line item alone seems small — $0.50 here, $1.20 there — but they accumulate to 5-15% of total COGS that operators routinely under-track.
The most-missed component is allocated overhead. Factories charge a labor and assembly rate but also have rent, utilities, and equipment depreciation that gets allocated across units produced. A factory quote of "$8 per unit" for materials + labor often becomes $9.50 per unit once their overhead allocation is included on the actual invoice.
Update COGS quarterly minimum. Material costs fluctuate, labor rates rise, freight costs swing wildly post-2020, and currency moves affect anything imported. The Landed Cost Calculator extends COGS to include cross-border specifics; the Contribution Margin Calculator uses your COGS to compute true per-order economics. Keep all three in sync.
Frequently asked questions
What should be included in COGS?
Direct materials, direct labor, manufacturing overhead allocated per unit, inbound freight (factory to your warehouse), import duties, and packaging that travels with the product. NOT included: outbound shipping to customer, marketing, salaries of office staff, or rent on offices not used for production.
What's the difference between COGS and landed cost?
Landed cost is COGS plus all costs to get inventory to your warehouse — duties, customs, inbound freight. Some operators use the terms interchangeably. Strict definition: COGS = production cost; Landed cost = COGS + freight/duties. The Landed Cost Calculator handles the cross-border specifics.
Should packaging be in COGS?
Yes if the packaging ships with the product (boxes, inserts, custom branding). No for warehouse-only packaging that doesn't reach customer. Custom packaging often costs $0.50-2 per unit and is one of the most-overlooked COGS line items.
Why does my COGS keep changing?
Because input costs change. Material costs, labor rates, freight, currency exchange (if importing) all fluctuate. Run COGS quarterly minimum, immediately after any factory price change or 5%+ FX move. Stale COGS leads to stale margin assumptions and bad pricing decisions.
How does volume affect COGS?
Significantly. Most factories offer tiered pricing — 1,000 units might cost 30% more per unit than 10,000 units. As you grow, recalculate COGS at each volume tier. The math at 1K units doesn't apply at 10K, and pricing decisions made on 1K-tier COGS leave money on the table at scale.