Harpy Glossary

COGS (Cost of Goods Sold)

Amazon & D2C glossary · Harpy Media

COGS (Cost of Goods Sold) is what your product costs you to get sellable: manufacturing plus freight, duties, and inbound logistics to your warehouse or Amazon’s — the landed cost per unit. Every margin conversation on Amazon starts here, because COGS is the first and largest subtraction from your price.

What is COGS?

The precision of the number matters more than its size. “COGS” that means factory price while forgetting ocean freight and duties understates true cost by 20–35% for typical imported goods — and every downstream decision (pricing, bids, deal depth) inherits the error. Landed COGS is the only honest version.

What goes into landed COGS (and what stays out)

In: unit price from the supplier, freight allocated per unit (container cost ÷ units), customs duties and tariffs, insurance, port and drayage charges, prep costs (polybag, labels, bundling), and inbound freight to FBA. Out: Amazon-side fees (referral, FBA — those are selling costs, not goods costs), PPC, and fixed overhead. The distinction isn’t academic: COGS drives inventory valuation, gross margin, and reorder economics; contaminating it with ad spend double-counts costs and corrupts every ratio built on it.

Why every big decision runs through this number

Pricing: your floor is COGS + fees + target contribution — not a competitor’s sticker. Deals: the deepest safe discount is arithmetic on COGS. Reordering: inventory purchases hit cash at COGS, so working capital planning is COGS math. And exits: acquirers re-underwrite your business from COGS up — a brand that can’t produce clean landed-COGS documentation takes a credibility discount on valuation day. It is, quietly, the most consequential single number in the P&L.

Landed COGS per unit = supplier price + freight/unit + duties/unit + prep + inbound to FCRecalculate it every time freight rates or tariffs move — last year’s number is this year’s mistake.

In practice

A brand quotes “$6.80 cost” from the invoice and prices accordingly. Rebuilding landed COGS (freight allocation $0.94, duty $0.31, prep $0.22, inbound $0.18) shows $8.45 — and the current price clears only $1.10 of contribution after fees. A 9% price move plus a packaging redesign that cuts freight-per-unit restores the margin the invoice-only number had hidden.

⚠️ Watch out. A seller tracks factory price as COGS for a year of growth. Every price, bid, and deal was built 22% optimistic; the business scales happily into a cash squeeze nobody can explain until the P&L is rebuilt line-by-line. The number was wrong; the decisions were perfect for the wrong number.

💡 Harpy tip. Keep a COGS build-up sheet per SKU with each cost component as its own line — when freight or tariffs move, you update one cell and watch the true margin move with it.

How Harpy Media helps

Landed-cost models per SKU are table stakes in our account builds — you can’t price, bid, or plan against a number you haven’t finished calculating.

COGS FAQ

What is COGS on Amazon?

Cost of Goods Sold — the landed cost per unit: manufacturing, freight, duties, prep, and inbound logistics. Not Amazon fees or ads.

What’s the difference between COGS and landed cost?

Nothing, if you’re doing it right — ‘landed’ just emphasizes that freight and duties are included, which is the only honest version.

Does COGS include FBA fees or PPC?

No — those are selling expenses. COGS is what the goods cost you before Amazon ever touches them.

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