Shopify's COGS Tracking: What You Get
Shopify includes a basic cost tracking system built around the "Cost per item" field on every product variant. When populated, this unlocks margin data in your Shopify Analytics reports.
For many small Shopify stores, this is a useful starting point. But it has meaningful limitations that matter significantly once you're running Google Shopping campaigns or managing a catalogue of more than a few dozen SKUs.
How to Enter Cost per Item in Shopify
Step-by-Step
- In your Shopify admin, click Products in the left sidebar.
- Select the product you want to update.
- Scroll down to the Pricing section.
- Enter your cost in the "Cost per item" field. Shopify will show the calculated margin percentage alongside it.
- If the product has multiple variants, click on each variant individually — the cost field is at the variant level, not the product level.
- Click Save.
Use Landed Cost, Not Invoice Price
The most important thing to get right: enter your landed cost — the total cost per unit including supplier price, inbound freight, import duties, and packaging. If you only enter the supplier invoice price, your margin reports will overstate profitability by 15–30% for imported goods.
Bulk Cost Updates
For stores with large catalogues, updating costs one-by-one is impractical. Use Shopify's bulk product import/export (Products → Import) to update the "Cost" column across all products in a single CSV upload. This is far faster when you're first setting up cost tracking or after a round of supplier price changes.
Calculating the Right Cost to Enter
COST-PER-ITEM CALCULATION
Supplier cost per unit: £12.00
Ocean freight (£800 for 400 units): £2.00 per unit
Import duty (5% of goods value): £0.60 per unit
Customs clearance (£120 for 400 units): £0.30 per unit
Branded packaging: £0.55 per unit
—
Enter in Shopify: £15.45 (not just £12.00)
Shopify Margin Reports
Once you've entered cost-per-item data, Shopify's Analytics section provides several margin reports:
Profit by Product Report
Found in Analytics → Reports → Finances → Profit by product. Shows gross profit and margin % per product over a selected date range. Useful for identifying your most and least profitable products at a glance.
Profit by SKU / Variant
Available on higher Shopify plans, this breaks down margin to variant level — essential if you have products with significant cost differences across sizes, colours, or configurations.
Shopify Analytics Overview
The main analytics dashboard shows total margin for the selected period. On Shopify Plus, this integrates with the Shopify Balance and financial overview tools.
Margin Reports Don't Include Ad Spend
Shopify's margin reports show gross profit (Revenue − COGS). They do not include advertising costs, shipping costs to customers, or payment processing fees. "Margin" in Shopify Analytics is gross margin, not net profit — don't confuse the two.
Shopify COGS Limitations
Shopify's native cost tracking has several significant limitations that affect brands running serious Google Shopping campaigns:
| Feature | Shopify Native | What You Need |
|---|---|---|
| Cost entry | Single manual field per variant | Multi-component cost (freight, duties, packaging) |
| Cost history | No — only current cost stored | Historical cost by purchase order for accurate FIFO |
| Currency handling | Stores in shop currency only | FX rate tracking for international sourcing |
| Ad cost integration | None | True profit per order including ad cost |
| ROAS targets by product | None | Calculated minimum ROAS per SKU for Google Ads |
| Return cost tracking | None | Net margin factoring in return rate and handling costs |
Third-Party Apps for Advanced COGS Tracking
If you need richer profit tracking, several Shopify apps go significantly further than native tools:
BeProfit
Pulls in advertising costs from Google Ads, Meta, and other channels alongside your Shopify sales data. Shows true profit-per-order, profit-per-product, and LTV metrics. Costs from £25/month.
Polar Analytics
Business intelligence tool focused on DTC brands. Consolidates data from Shopify, ad platforms, and shipping carriers into a single dashboard. Better for larger brands wanting SQL-level data access.
Glew.io
Multi-channel analytics platform for e-commerce. Strong on customer LTV and cohort analysis alongside margin data. Better suited to brands on Shopify Plus.
Xero / QuickBooks Inventory
For accountancy-grade COGS tracking with FIFO or weighted average cost methods, syncing Shopify to Xero or QuickBooks with inventory enabled gives the most accurate picture for your P&L and for tax purposes.
Connecting COGS to Ad Performance
The biggest gap in Shopify's native tools is the complete absence of any connection between your COGS data and your advertising performance. This means you can't answer the fundamental question: "Is this Google Shopping campaign actually profitable after product costs?"
Answering that question requires:
- Your COGS (or landed cost) per product variant
- Your Google Ads spend per product (from Google Ads reports or the Shopping feed)
- Your revenue and units sold per product
- A calculation of profit after COGS and ad spend, at the SKU level
PROFIT-PER-CLICK CALCULATION
Product sells for £49.99 | COGS: £18.50 | Gross Profit per Unit: £31.49
Conversion rate: 2.1% | Average CPC: £0.45
Gross profit per 100 clicks = 2.1 sales × £31.49 = £66.13
Ad cost per 100 clicks = 100 × £0.45 = £45.00
Net contribution per 100 clicks: £21.13 — profitable
If COGS was overstated by £5, calculated gross profit would be £56.13 and net contribution only £11.13 — still profitable but you might have cut the campaign unnecessarily.
GROW Platform Does This Automatically
GROW Platform stores your COGS per SKU and connects directly to your Google Ads account. It calculates the minimum profitable ROAS for each product and sets bids accordingly — so you're never running campaigns that look profitable in Google Ads but are actually losing money once COGS is factored in.
Frequently Asked Questions
Where do I enter product cost in Shopify?
In Shopify admin, go to Products, select a product, scroll to the Pricing section, and enter the value in the "Cost per item" field. This must be done per variant if the product has multiple variants with different costs.
Does Shopify calculate COGS automatically?
No. Shopify uses the cost-per-item you manually enter. It does not automatically factor in freight, import duties, or packaging. You need to calculate your true landed cost and enter that figure as the cost-per-item.
What COGS reports does Shopify provide?
Shopify provides margin reports in the Analytics section showing margin per product, margin per order, and margin over time. These reports are only as accurate as the cost-per-item data you've entered.
Can Shopify connect my product costs to Google Ads performance?
Not natively. Shopify can export conversion data to Google Ads but doesn't automatically factor in your COGS when calculating ROAS or profit per campaign. You need either a third-party tool or a platform like GROW to bridge this gap.
What are the best Shopify apps for COGS tracking?
For advanced COGS and profit tracking, BeProfit, Glew.io, and Polar Analytics are popular options. They pull in ad costs alongside Shopify data to give you true profit-per-order reports. GROW Platform connects your COGS data directly to Google Ads bidding decisions.
Next Steps
Start by auditing your Shopify cost-per-item data. Check how many products have no cost entered, and for those that do, verify whether the figure includes freight and duties. A one-hour CSV audit of your product catalogue can dramatically improve the accuracy of every margin decision you make.
Connect Your Costs to Google Ads Bidding
GROW Platform imports your product catalogue, stores full landed cost per SKU, and automatically calculates the profitable ROAS target for each Google Shopping campaign. No more guessing whether your ads are truly profitable. Create an account →
