Understanding your true cost of goods sold (COGS) is one of the most important pieces of e-commerce bookkeeping. COGS isn’t just your supplier price; it includes shipping, duties, manufacturing costs, packaging, and freight. Many store owners underestimate their COGS, which makes profit look higher than it is.
To calculate accurate landed cost per SKU, you need to allocate all related expenses across your inventory. This gives you clearer insight into margins, pricing, and cash flow. Without accurate COGS, your financial statements won’t reflect your real profitability.
Using tools to track purchase orders, warehouse movements, and inventory value helps simplify this process. Pairing these systems with Xero gives you a consistent picture of what inventory costs your business.
Accurate COGS leads to better pricing decisions, healthier margins, and clearer performance insights.