Introduction to Cost of Goods Sold (COGS) in SellerLegend
Overview
COGS enables SellerLegend to compute genuine profit by factoring in product expenses. You establish the cost per unit over designated time periods, which the system then applies to sales reports, profit dashboards, and P&L statements with temporal precision.
Definition and Scope
COGS represents the complete landed cost per unit, encompassing:
- Manufacturing
- Packaging
- Shipping to warehouse
- Customs duties
- Inspection
- Fulfillment preparation
It excludes direct Amazon charges like FBA fees, which are already captured in your Seller Central account.
Key Characteristics
Time-Based Model
Rather than using static costs, SellerLegend employs period-based costing. You establish multiple cost periods per product, each with its own unit price. The system automatically matches each order to its corresponding cost period based on the sale date.
Impact on Financial Reporting
COGS data influences:
- Gross profit calculations
- Total profit after fees
- Profit margins
- Product-level profitability analysis
When COGS is updated retrospectively, all applicable reports recalculate automatically.
Entry Methods
You can enter COGS through:
- Manual entry — for small product quantities
- Bulk upload — using Excel templates for high-volume setups
Each method supports Simple View (unit cost only) or Detailed View (including currency, provider notes, and payment totals).
Consequences of Omission
Without defined COGS:
- Profit dashboards overstate earnings
- Sales reports show misleading margins
- P&L statements lack accurate cost data
- Financial visibility and tax analysis accuracy are compromised