What Is COGS (Cost of Goods Sold) in Print-on-Demand?
Quick Answer: COGS (Cost of Goods Sold) in print-on-demand (POD) is the direct cost you pay to produce and fulfill each order. It includes product blanks, printing costs, and shipping fees from providers like Printify or Printful. COGS does not include marketing, transaction fees, or overhead. Tracking COGS correctly is the first step to calculating true profit in POD.
If you’re learning how to calculate profits, start with How to Calculate POD Profits (Step-by-Step). And if you want your COGS pulled in automatically from Printify and Printful, try PodVector. For industry context, see Shopify’s guide on Cost of Goods Sold (COGS).
Table of Contents
What Is COGS in POD?
In traditional retail, COGS refers to the cost of producing goods. In print-on-demand, COGS is what you pay your fulfillment partner (Printify, Printful, etc.) to create and deliver a product to the customer. This number comes directly from the supplier and varies depending on the product, print method, and shipping destination.
Formula
The formula for COGS in POD is:
COGS = Product Cost + Printing Fees + Shipping Fees
It excludes marketing and platform fees, which are considered operating costs, not production costs.
What’s Included in COGS?
- Product blank cost: The base price of the blank (e.g., a Bella+Canvas 3001 t-shirt).
- Printing cost: Charges for DTG, screen printing, sublimation, embroidery, etc.
- Shipping cost: Domestic or international shipping from the POD provider to the customer.
- Packaging fees: Sometimes included in shipping, sometimes billed separately.
Example COGS Calculation
Say you sell a custom hoodie:
- Product blank: $14.50
- Printing: $6.50
- Shipping: $5.00 (domestic)
Total COGS = $14.50 + $6.50 + $5.00 = $26.00
If you sell the hoodie for $50, your gross profit is $24 before ads, fees, and refunds.
Why COGS Matters in POD
- Baseline profit: If you don’t know COGS, you can’t calculate margins.
- Pricing decisions: COGS sets the floor for what you can charge.
- Scaling ads: Ad spend decisions rely on knowing how much margin you have after COGS.
- Product mix: Higher COGS products may not be worth scaling unless AOV is higher.
COGS Benchmarks for POD Products
- T-shirts: $7–$13
- Hoodies: $20–$30
- Mugs: $5–$8
- Posters/Wall Art: $8–$15
- Hats: $12–$18
These numbers vary by provider, region, and print method. Always confirm with your supplier before setting prices.
How to Track COGS
Manual Tracking
- Log product and shipping costs from Printify/Printful invoices.
- Track them in a spreadsheet for each SKU.
- Update regularly when provider costs change.
Automated Tracking
PodVector automatically pulls product and shipping costs from Printify and Printful, syncing them into your profit dashboard in real time. No manual entry required.
COGS vs Other Metrics
- COGS vs Operating Expenses: COGS covers only production costs. Ads, transaction fees, and software are separate operating expenses.
- COGS vs Gross Profit: Gross profit = Net sales – COGS.
- COGS vs GPAM: GPAM subtracts COGS and marketing costs, showing what’s left after ads.
How to Reduce COGS
- Choose cost-effective blanks: Some providers offer cheaper equivalents with similar quality.
- Leverage bulk discounts: Some POD platforms give discounts at higher monthly volumes.
- Use regional providers: Shipping costs drop when fulfillment centers are closer to customers.
- Test alternative providers: Costs vary widely across Printify providers and Printful warehouses.
FAQs
Does COGS include ad spend?
No. Ad spend is considered a marketing expense, not part of COGS.
Does COGS include transaction fees?
No. Payment processing fees are operating costs, not part of COGS.
How often should I update COGS?
At least monthly. Providers change product and shipping costs often, especially during Q4.
Can PodVector track COGS automatically?
Yes. PodVector pulls product and shipping costs directly from Printify and Printful into your analytics dashboard.
Track Your COGS Automatically
Stop updating spreadsheets manually. PodVector syncs COGS from Printify and Printful, so you always know your real profit.
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