> ## Documentation Index
> Fetch the complete documentation index at: https://docs.upstackdata.com/llms.txt
> Use this file to discover all available pages before exploring further.

# COGS Net Rate: Product Cost as % of Net Revenue

> Measure what percentage of net revenue goes to product costs. Track cost efficiency after discounts and refunds with formula and examples.

<Tip>
  COGS as a percentage of net revenue—higher than gross rate because discounts and refunds reduce the denominator.
</Tip>

## Formula

<Info>
  **COGS Net Rate** = ( [**COGS**](/reference/metrics/orders/cogs/cogs) ÷ [**Net Revenue**](/reference/metrics/orders/revenue/net-revenue) ) × 100
</Info>

### Formula Components

| Metric                                                           | Definition                          |
| ---------------------------------------------------------------- | ----------------------------------- |
| [**COGS**](/reference/metrics/orders/cogs/cogs)                  | Total cost of products sold         |
| [**Net Revenue**](/reference/metrics/orders/revenue/net-revenue) | Revenue after discounts and refunds |

| Metadata        |                                                                         |
| --------------- | ----------------------------------------------------------------------- |
| **Type**        | Percentage                                                              |
| **Data Source** | [Shopify](/sources/shopify), [Upstack Costs](/dashboard/settings/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%** |

This means 38% of your retained revenue goes toward product costs, leaving 62% gross margin on net revenue.

***

## 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    |

***

## Related Metrics

| Metric                                                                                              | Relationship                    |
| --------------------------------------------------------------------------------------------------- | ------------------------------- |
| [COGS](/reference/metrics/orders/cogs/cogs)                                                         | Dollar value used in numerator  |
| [Net Revenue](/reference/metrics/orders/revenue/net-revenue)                                        | Revenue baseline in denominator |
| [New Customer COGS Net Rate](/reference/metrics/orders/cogs/new-customer-cogs-net-rate)             | First-time buyer segment        |
| [Returning Customer COGS Net Rate](/reference/metrics/orders/cogs/returning-customer-cogs-net-rate) | Repeat buyer segment            |

[See all COGS metrics →](/reference/metrics/orders/cogs)