- TikTok Shop has no built-in COGS field — if you don't track it yourself, you can't know your real profit
- COGS means your full landed cost: unit price + packaging + labeling + inbound shipping + duties
- Track COGS per SKU, not as a flat percentage — a 30% average hides products that lose money
- When your supplier price changes, update COGS with an effective date so historical margins stay accurate
TikTok Shop COGS (Cost of Goods Sold) is the total cost to get each product ready to ship to a customer. It's the single biggest expense most sellers have — and the one TikTok completely ignores. There's no COGS field in Seller Center, no way to enter your product cost, and no profit calculation built into the platform.
If you don't track COGS yourself, every number in your TikTok Shop dashboard is incomplete. Revenue looks great. Profit might be zero. This guide shows you exactly how to calculate COGS for TikTok Shop products, what to include, what sellers get wrong, and how to track it efficiently. You can also use our free TikTok Shop profit calculator to see how COGS impacts your margin instantly.
What Is COGS and Why TikTok Doesn't Track It
Cost of Goods Sold is the direct cost of producing or acquiring the products you sell. For TikTok Shop sellers, this typically means what you pay your supplier plus everything it takes to get that product into your warehouse or fulfillment center, ready to be picked and packed.
TikTok Shop tracks your revenue, referral fees, affiliate commissions, and refunds — but not your product cost. This is by design: TikTok is a marketplace, not an accounting tool. But the result is that Seller Center shows you a revenue number that has no relation to your actual profit.
This is exactly why sellers overestimate their earnings. A shop doing £10,000/month in revenue might only keep £2,000 after COGS, fees, and ad spend — but Seller Center will show the £10,000 and nothing else.
For the full profit formula including every cost line, see our guide to calculating TikTok Shop profit.
What to Include in Your COGS
Your COGS isn't just the price on your supplier's invoice. It's your landed cost — everything you spend to get one unit ready to ship to a customer. Here's what to include:
Unit cost — what your supplier charges per unit. This is the base price most sellers start with, but it's only one part of the equation.
Packaging — boxes, poly mailers, tissue paper, inserts, thank-you cards, stickers. If it goes in or around the product before it ships, it's part of your COGS.
Labeling — barcodes, SKU labels, regulatory labels. If you're selling in the UK, you may need specific compliance labeling that adds per-unit cost.
Inbound shipping — the cost to get products from your supplier to your warehouse or FBT center. This includes freight (sea, air, or truck), customs brokerage, and last-mile delivery to your storage location. Divide the total shipment cost by the number of units to get a per-unit figure.
Import duties and taxes — if you're sourcing internationally (most TikTok Shop sellers do), customs duties are a real cost. For UK sellers importing from China, duty rates vary by product category. Don't forget this — it can add 3–12% to your unit cost.
Quality inspection — if you use a third-party inspection service before shipping, divide that cost across the batch.
The Landed Cost Formula
COGS per unit = Unit Price + Packaging + Labeling + (Inbound Shipping ÷ Units) + (Duties ÷ Units) + (Inspection ÷ Units)
Example: You source a skincare set from a supplier at £3.00/unit. Packaging costs £0.40, labeling £0.10, inbound shipping for 500 units is £250 (£0.50/unit), and import duty is £150 (£0.30/unit).
Landed cost = £3.00 + £0.40 + £0.10 + £0.50 + £0.30 = £4.30/unit
That's 43% higher than the supplier's invoice price. If you tracked COGS as £3.00, your profit calculations would be wrong on every single order.
Why You Must Track COGS Per SKU
The most common mistake sellers make is using a flat percentage for COGS — "my COGS is about 30% of revenue." This hides massive differences between products.
Example:
| Product | Revenue | COGS | COGS % | Net Margin (after fees) |
|---|---|---|---|---|
| Skincare Set | £29.99 | £4.30 | 14% | ~35% |
| Phone Case | £8.99 | £5.50 | 61% | ~2% |
| Hair Oil | £19.99 | £3.80 | 19% | ~30% |
If you average these, your shop-wide COGS looks like 31% — reasonable. But the phone case is barely profitable. At a 61% COGS ratio, any affiliate commission or ad spend pushes it into a loss. You'd never know this from a blended average.
Per-SKU tracking lets you spot these problems before they drain your profit. Cut the losers, double down on the winners. And if a product's COGS ratio is too high relative to its market price, the answer is to either renegotiate supplier costs or rethink your pricing — see our TikTok Shop pricing strategy guide for the backward formula that tells you the minimum price you can charge.
For benchmarks on what margins to target by product category, see our TikTok Shop profit margin benchmarks.
When and How to Update Your COGS
Your COGS isn't static. Supplier prices change, shipping rates fluctuate, and currency exchange rates move. Here's what triggers a COGS update:
Supplier price changes — if your supplier raises prices by 10%, your landed cost jumps immediately. Update your records for all affected SKUs.
New shipping rates — seasonal shipping surcharges (especially Q4) can add £0.50–£2.00 per unit. Recalculate after every new shipment.
Currency fluctuations — if you pay suppliers in USD or CNY but sell in GBP, exchange rate shifts directly impact your product cost. A 5% GBP drop against the dollar means 5% higher COGS overnight.
New batch, new cost — each production run may have different costs. Track COGS per batch, not just per SKU.
The Effective Date Problem
When your COGS changes, you need to apply the new cost only to orders placed after the change — not retroactively to all historical orders. Otherwise, your past profit calculations become inaccurate.
Example: Your skincare set COGS was £4.30 from January to March. In April, your supplier raises the price and your new landed cost is £4.80. If you overwrite the old COGS with £4.80, your January–March margins now look worse than they actually were.
The solution is COGS with effective dates — each cost entry has a start date, and the system uses the correct cost for each order based on when it was placed. This is exactly how Margn handles it: when you update a product's COGS, you set an effective date and historical margins stay accurate.
Common COGS Mistakes TikTok Shop Sellers Make
1. Forgetting inbound shipping. Your supplier quotes you £3.00/unit. You record £3.00 as COGS. But you paid £500 to ship 500 units — that's another £1.00/unit you're ignoring. Your real COGS is £4.00, and your margin is 25% lower than you think.
2. Ignoring packaging costs. Custom boxes, branded inserts, poly mailers — these cost £0.20–£1.00 per unit. Multiply by 1,000 orders/month and it's £200–£1,000 in costs you're not tracking.
3. Using a flat percentage instead of per-SKU costs. A shop with 20 products and a "30% average COGS" is hiding at least 3–5 products that are losing money. You won't find them until you track each SKU individually.
4. Not updating when costs change. Your COGS from 6 months ago is probably wrong today. Suppliers change prices, shipping rates fluctuate, exchange rates move. Review COGS quarterly at minimum.
5. Excluding import duties. For UK sellers importing from Asia, duties can add 5–12% to your unit cost. If you're not including them, your landed cost is understated on every product.
How to Track COGS Efficiently
Manual Method (Spreadsheet)
Create a spreadsheet with columns: SKU, Product Name, Unit Cost, Packaging, Labeling, Shipping/Unit, Duties/Unit, Total COGS, Effective Date. Update it every time you receive a new shipment or your supplier changes prices.
This works for sellers with under 20 SKUs. Beyond that, it becomes error-prone and time-consuming — especially when you need to match COGS to specific time periods for P&L reporting.
Automated Method (Margn)
Margn lets you import COGS via CSV with automatic SKU matching. Upload a file with your SKU and cost columns, and Margn matches each row to your products. You can set effective dates so historical margins stay accurate when costs change.
Combined with automatic fee tracking from your TikTok Shop orders, this gives you a complete per-SKU P&L without spreadsheets.
- Free plan: 500 orders/month, full COGS management
- Pro plan (€19/mo): Unlimited orders, 15-min sync, ad spend tracking, CSV export
For a comparison of all available tracking tools, see our guide to the best TikTok Shop profit trackers.
Know Your Real COGS, Know Your Real Profit
Every profit number on TikTok Shop starts with COGS. If your product cost is wrong, everything downstream — margin, ROAS, pricing decisions — is wrong too. The sellers who build sustainable businesses are the ones who know their landed cost per unit, track it per SKU, and update it when costs change.
Plug your real COGS into our profit calculator to see your true margin. And for a full walkthrough of every cost in the profit formula, read our guide to calculating TikTok Shop profit.
For a complete breakdown of all TikTok Shop fees that sit on top of your COGS, see our 2026 fees guide.
Ready to stop guessing your product costs? Import your COGS into Margn — free for 500 orders/month, no credit card required.
