Business & Pricing
COGS/kogs/
Cost of Goods Sold — every cost directly tied to making and delivering one unit: materials, labor, packaging, shipping, processing fees.
View on brothh.comWhat it means
COGS is the total cost of making and delivering one unit of product. For makers, it includes raw materials (with wastage), labor (with payroll burden), packaging, shipping you absorb, payment processing, platform fees, and allocated overhead (rent/utilities/insurance divided by monthly volume).
Gross margin = (price − COGS) ÷ price. Most makers underprice because they miss 2-4 of the COGS buckets. Common misses: packaging (box, labels, stickers, tissue, mailer — often $2-4/unit), payment fees (~3.5% of price), platform fees (6-15%), and self-employment tax (15.3% on profit).
Examples
Candle maker unit COGS
Wax $1.80 + wick $0.12 + fragrance $0.85 + jar $1.10 + label $0.20 + box $0.65 + labor $3.50 + overhead $1.25 = $9.47
At $28 retail
COGS $9.47 + fees $3.80 + ship $2.00 = net $12.73/unit (45% margin)
Do
- Include YOUR labor at a real hourly rate — not $0.
- Rebuild COGS any time a supplier price changes.
Don't
- Confuse COGS with operating expenses (payroll of the shop manager, software subscriptions, office supplies) — those go elsewhere on the P&L.
Related terms
Calculators that use this
True Product COGS (No-BS)
The real cost to make and sell one unit — materials with wastage, packaging, labor with burden, overhead, payment + platform fees, shipping absorbed, income + self-employment taxes. All in.
Packaging Cost Per Unit
Sum the real packaging stack — box, label, stickers, tissue, mailer, void fill, tape, ship label — into a single per-unit cost.
Wastage Buffer Reference
Industry-standard waste percentages for 20 common maker materials — feed into the True Product COGS calc for honest pricing.