Getting a product from your supplier to Amazon requires investment. This investment is your Cost of Goods Sold or COGS.
What are COGS?
COGS refers to the direct costs of producing the goods sold by a company. This amount includes the cost of the materials and labor directly used to create the good. Within Flywheel, we also encourage you to include your distribution (shipping) costs.
COGS excludes indirect costs such as overhead, ad spend, and marketing.
How do we use COGS in Flywheel?
COGS data helps us provide a holistic view of how your Amazon business is performing. Upload this information on the Product Settings page to unlock additional features and gain insights in Flywheel, such as:
- Estimated Gross Profit: View trends for your business on the Home Page and individual products on the Product Metrics page
- Estimated Gross Margin: Available at product level on the Product Metrics page
- Pre-Ad Gross Margin: Understand your margins before factoring in ad spend. Use this metric on the Campaigns page to help you set MACS
- MACS Calculator: COGS are required to use this functionality.
- Campaign Creator: COGS will help the Campaign Creator provide more accurate MACS suggestions.
In Flywheel 2.0 Inventory Optimization, COGS are used to calculate inventory value, est. profit margin, and the return on investment. Interested in learning more about Flywheel 2.0 request to be part of our early access program.
How do you enter COGS?
Learn how to set COGS in Flywheel here.