How to Track COGS Accurately in Shopify?
How to Track COGS Accurately in Shopify? Cost of Goods Sold (COGS) is a crucial financial metric for any Shopify store owner. It represents the direct costs involved in producing or purchasing the products you sell. Accurately tracking COGS helps you understand true profitability, set appropriate pricing, and make informed inventory and purchasing decisions. For businesses aiming to scale, having a precise handle on COGS is a cornerstone of effective financial management. Why COGS Matters COGS directly affects your gross profit. The formula is simple: Gross Profit = Revenue – COGS When COGS is recorded correctly, your profit margins become clear, allowing you to evaluate which products are performing best and where you might be overspending. Inaccurate COGS, on the other hand, can distort your financial reports, leading to misinformed decisions that hurt your bottom line. Using Shopify to Track COGS Shopify allows you to enter cost prices for each product or variant. By navigating to t...