New to Amazon? Unpack COGS in 8 Easy Steps

Hey there, Amazon seller! If you’re new to Amazon, you probably feel like you have a lot to learn. That’s why we’re here to make it a little easier for you. Let’s talk about COGS—or cost of goods sold—one of the more complex topics when it comes to selling on Amazon. COGS is an incredibly important part of your business—it helps inform pricing, as well as product and marketing decisions. But if you’re new to Amazon, understanding COGS can feel daunting and complex. Don’t worry; we’ll break it down for you in a simple, step-by-step guide. In 8 easy steps, we’ll show you how to unpack what COGS means and how it works on Amazon. Let’s get started!

Analyzing COGS to Increase Profits

If you’re just getting started with Amazon, chances are you might be wondering how you can use COGS to increase profits. In this section, we’ll break down the steps to analyzing your COGS and how it can help with increasing profits:

Step 1: Understand overall COGS

The first step to analyzing your COGS is understanding your overall expenses. This means taking into account manufacturing costs, material costs, labor costs and more. It’s important to get an accurate picture of your current spending since that will give you an idea of what needs to be changed and improved. .

Step 2: Take a closer look at individual expenses

Once you have an understanding of your overall expenses, it’s now time to take a closer look at each individual expense item so that you can identify areas for improvement. By doing this analysis on a granular level, it can help identify problem areas that need immediate attention.

Step 3: Identify high performing products

Now that you have a better understanding of what’s causing your costs to be higher or lower than usual, it’s time to identify which products or services are producing the highest profit margins for the company. Understanding which products are generating the most sales will allow you to strategize around those high-performing products, which in turn should lead to increased profits over time.

Step 4: Explore potential cost savings opportunities

Having identified the high-performing products in step 3 above, it’s now time to explore potential cost savings opportunities when it comes those items. Identifying and eliminating any inefficiencies in the production process could lead to significant cost savings over the long run and ultimately increase profits as well.

How to Identify and Reduce Overpriced COGs

Are you looking for ways to identify and reduce overpriced COGS on Amazon? The good news is that there are some easy steps you can follow to help you with this. Here are eight simple ways to help you unpack Amazon COGS.

1. Analyze the Supply Chain

To start, make sure that you analyze your entire supply chain as well as any additional costs associated with getting your product to market. This will give you a full picture of where your costs are coming from, so you can better determine which parts can be optimized.

2. Streamline Processes

Streamlining processes is another great way to reduce your COGS. Look for ways to eliminate unnecessary steps in the production process and analyze data sets to ensure that resources aren’t being wasted at any stage. You may also want to consider automating certain tasks or outsourcing certain activities if it makes sense for your budget and business needs.

3. Monitor Prices

You should also monitor prices on a regular basis, especially if you’re sourcing raw materials from different vendors or managing multiple suppliers. This will help ensure that you’re not overpaying for materials or services, and it will also allow you to take advantage of any discounts or deals that may become available over time.

Automating CoGS Reporting on Amazon

If you’re new to Amazon, you might not know that you can automate your COGS reporting. This is a great way to save time and make sure you’re always on top of changes in your costs.

Here are the 8 easy steps to get started:

  1. Set up reliable sources of data
  2. Map out a strategy for collecting COGS
  3. Establish an accurate process for calculating your costs
  4. Identify which platforms to use for collecting and reporting data
  5. Utilize the right technology for analyzing data
  6. Implement an automated system for tracking COGS over time
  7. Streamline the reporting process on Amazon
  8. Leverage automation tools to detect cost fluctuations

With automation, you don’t have to worry about manually entering and updating every single COG every month — freeing up time for more strategic work that will ultimately drive profits for your business!

Conclusion

Accurate understanding of Amazon COGS is a crucial aspect for any ecommerce business that seeks to maximize its profits. All costs related to the production and delivery of products are part of COGS, and they should be accounted for in a precise manner. Having knowledge about the various types of COGS and their impact on the overall profitability of the business is important. By gaining an in-depth understanding of Amazon COGS, sellers can make informed decisions that will benefit their business in the long run. CartKaboom can be a valuable tool in this regard as it provides resources and expertise to help ecommerce businesses accurately account for their costs and optimize their profitability.
Scroll to Top

Krystel Borg

Krystel possesses a unique expertise in transforming company sales, thanks to her knack for devising strategic blueprints and fostering high-performing teams. Throughout her career, she’s been at the helm of businesses that have burgeoned from mere startups to eight-figure giants. She boasts two notable exits in the CPG sector, with one being the acclaimed Swander Pace Private Equity Group.
Her profound understanding of product-centric ventures spans the entire lifecycle—from conceptualizing brands to overseeing logistics, supply chain management, and devising robust digital marketing initiatives. One of Krystel’s standout accomplishments in sales is her tenure with QVC, where she not only celebrated over 100 on-air appearances but also clinched a nomination for their coveted “Rising Star” award, sharing the limelight with industry titans like Sephora.
With a proven track record of scaling startups to monumental heights—like achieving $1.5M in revenue within a year and subsequently doubling it—and salvaging firms from deficits to enjoy $1.8M profits, Krystel’s prowess is undeniable. She masterfully steered a company to emerge as an unrivaled leader in its sector by multiplying its sales from $4M to $18M in half a decade.
In recent years, Krystel has channeled her vast experience into mentoring, playing pivotal roles as a consultant or board member to embolden fellow entrepreneurs. Her versatility is further accentuated by her engagements across diverse industries

Navin Williams

With 11 years of leadership experience in Business Management, Navin Williams has consistently delivered transformative results. His leadership has championed small businesses on their path to accelerated growth, steered large enterprises towards a surge in efficiency by up to 40%, and provided strategic direction to e-commerce companies navigating the dynamic digital marketplace.
His toolkit of expertise encompasses spearheading organizational transformations, enhancing business agility, and driving process efficiency across a spectrum of domains and frameworks, with a particular emphasis on Lean principles. Understanding the unique challenges and opportunities presented by both brick-and-mortar operations and digital storefronts, Navin is adept at crafting strategies that align with specific business objectives.
His commitment to rigorous reporting ensures transparency and data-driven decision-making, solidifying his reputation as a versatile and results-driven business leader.

Jane Sampson

Jane Sampson boasts over 15 years in the Apparel & Home Fashions sector. Throughout her career, she’s demonstrated a depth of knowledge in areas like Design, Product Development, Global Sourcing, and Market Research. Her business acumen is backed by a proven record in Procurement, Business Planning, and Sales.
Central to Jane’s professional journey is JANEEN HOME LLC. This company, under her leadership, specializes in introducing new textures, designs, and prints for bedding and soft home lines. Her brand’s presence is felt in prominent retailers such as Macy’s, Ross Stores, Hobby Lobby, Bealls, and Belk.
Beyond her corporate achievements, Jane shares her industry insights as an Adjunct Professor at Baylor University. She remains committed to fostering growth and nurturing future talents, ensuring they’re equipped for success in the dynamic world of Apparel & Home Fashions.

Archana Reddy Williams

From the corporate world to the dynamic world of Amazon, Archana’s journey has been nothing short of transformative. As a seasoned management consultant, corporate leader, and a 7-figure Amazon seller, she founded CartKaboom with a vision to demystify the Amazon maze for brands.
What drives Archana? Her passion for ensuring every brand gets a fair shot at success on Amazon. CartKaboom works tirelessly as a partner, acting as a true extension of brands, ensuring they shine in the Amazon marketplace. While she cherishes working with all types of businesses, Archana’s heart holds a special place for family-owned and women-led brands. Drawing from a wealth of firsthand insights and tailored strategies, she’s had the honour of propelling many of these businesses to 7+ figure successes on Amazon.
At the heart of CartKaboom, it’s not just about metrics. Archana delves deep into a brand’s narrative and core values, designing Amazon-focused strategies that amplify their presence. From listing enhancements and keyword optimization to effective advertising campaigns, Archana ensures that brands don’t just survive, but thrive in this ecommerce behemoth. Outside the world of ecommerce, Archana is active in real estate. As an Accredited Real Estate Investor and a CRE General Partner, she oversees diverse commercial real estate ventures, bringing the same dedication and business acumen to this vertical.
At the core of it all, Archana’s faith in God and her family remain her pillars. She resides in Dallas, Texas with her husband and three kids. For relaxation and fun, she enjoys travelling, hiking, and exploring nature, seeing it as a reflection of God’s beauty. She’s also active in local church initiatives, emphasising community growth and unity.