For a D2C brand, COGS is usually the landed cost per unit multiplied by units sold. It excludes the costs of selling and delivering, such as shipping to customers, payment fees and marketing, which sit below gross margin in a contribution P&L.

Keep cost per unit up to date in your store. A stale cost that is 15% too low quietly inflates every margin and break-even ROAS calculation built on it.

Formula

COGS = Units sold × Landed cost per unit

Example

1,200 units at a landed cost of ₹310 is COGS of ₹3,72,000.

Work it out: Margin and markup

Margin from cost and price, or the price you need for a target margin, with tax handled properly.

Related terms

Where this comes up

ROAS is not a business metricReturn on ad spend tells you how the platform sees your campaigns. Contribution margin tells you whether the business is better off. Here is how to run paid media on the second.

Part of the growth marketing glossary by Shiva Sharma.