Variable cost of goods sold is the portion of a product's cost that moves with each unit sold. For multi-marketplace ecommerce sellers, it's the number that determines whether a SKU actually makes money once you ship it.
Variable COGS is the per-unit cost of producing and selling one additional unit of a product. It includes the costs that scale directly with sales volume: manufacturing or wholesale purchase price, inbound shipping, fulfillment center fees per unit, picking and packing, and any per-unit landed cost adjustments like tariffs or import duties.
It does not include fixed costs like warehouse rent, software subscriptions, or salaries. Those are operating expenses, not COGS.
Variable COGS per unit = Wholesale or manufacturing cost
+ Inbound freight per unit
+ Tariffs / import duties per unit
+ Fulfillment center receiving fee per unit
+ Pick & pack fee per unit
+ Per-unit packaging materials
Traditional retail accounting often treats COGS as a simple wholesale price plus a freight allocation. For ecommerce sellers running on Amazon FBA, Shopify with 3PL fulfillment, or multi-marketplace operations, that's incomplete. The per-unit cost shifts as fees change, tariffs land, and you switch fulfillment centers. A SKU that looked profitable in January at a $4.20 variable cost can be losing 80 cents per unit in August at $5.00 after a tariff increase and an FBA storage fee change.
Tracking variable COGS at the per-SKU, per-unit level is the difference between knowing your business made money this quarter and knowing which products made the money. The second view is what informs pricing, inventory, and promotional decisions.
A multi-marketplace seller buys a kitchen gadget at $4.20 wholesale. Inbound ocean freight allocates to $0.35 per unit. The 7.5% Section 301 tariff adds $0.32. Amazon FBA inbound shipping is $0.18 per unit. Pick and pack at the 3PL warehouse for the Shopify channel is $1.10. Per-unit packaging is $0.40.
Variable COGS per unit (FBA) = $4.20 + $0.35 + $0.32 + $0.18 + $0.40 = $5.45
Variable COGS per unit (DTC) = $4.20 + $0.35 + $0.32 + $1.10 + $0.40 = $6.37
Same product, two different cost structures depending on which channel ships it.
ConnectBooks calculates variable COGS per SKU automatically, recalculating each time a new lot is received with different landed costs. The SKU-level P&L view shows the per-unit margin trend over time so sellers can see margin compression before it shows up at the quarter-end income statement.
Running an e-commerce business comes with plenty of challenges, but ConnectBooks is here to make your life easier. With real-time insights, seamless integrations, and detailed tracking of your profitability and inventory, you can stay ahead of the game. Whether you’re selling on Amazon, Shopify, Walmart, TikTok or eBay, ConnectBooks helps you manage your finances with 100% accuracy and confidence, so you can focus on growing your business.
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