COGS as a percentage of net revenue—higher than gross rate because discounts and refunds reduce the denominator.
| Metric | Definition |
|---|
| COGS | Total cost of products sold |
| Net Revenue | Revenue after discounts and refunds |
| Metadata | |
|---|
| Type | Percentage |
| Data Source | Shopify, Upstack Costs |
| Aggregation | Ratio |
Example
Your store generated $125,000 in net revenue with $47,500 in product costs this month:
| Metric | Value |
|---|
| Net Revenue | $125,000 |
| COGS | $47,500 |
| COGS Net Rate | 38.0% |
How It Works
Divides total COGS by net revenue (after discounts and refunds), then multiplies by 100. This rate is higher than the gross rate because discounts and refunds reduce the denominator. A lower percentage indicates better margin retention after adjustments.
When to Use
| Scenario | Action |
|---|
| True profitability | Use after-adjustment baseline for margin analysis |
| Discount impact | Compare to gross rate to see how discounts affect cost ratios |
| Margin benchmarking | Track trends to ensure costs don’t outpace net revenue |
| Segment comparison | Compare against NC and RC rates for customer-type insights |
| Metric | Relationship |
|---|
| COGS | Dollar value used in numerator |
| Net Revenue | Revenue baseline in denominator |
| New Customer COGS Net Rate | First-time buyer segment |
| Returning Customer COGS Net Rate | Repeat buyer segment |
