Your supplier's price list says ₱2,800 for a 15kg bag. You sell it for ₱3,300. That is ₱500 a bag, or so it seems.
Then the delivery fee shows up on the invoice. The helper who unloads the truck needs to be paid. The rebate the supplier promised comes off the next order instead of this one. By the time the bag sits on your shelf, it cost more than the price list said.
That gap is exactly what cost of goods sold, or COGS, is meant to capture. Get it right, and every pricing and profit decision after it gets easier.
What Is COGS?
The cost of what you sold, not of what you bought.
Cost of goods sold (COGS) is what the products you actually sold during a period cost you, including the cost of getting them onto your shelf. It is the second line of the profit formula from Lesson 01: Sales − COGS − Operating Expenses.
Supplier Price
What the price list or invoice says per unit. Most owners stop here, which is why margins look better on paper than in the bank.
Landed Cost
Supplier price plus delivery and handling per unit, minus any rebates. What one unit truly costs once it is on your shelf.
Monthly COGS
The landed cost of everything that actually sold this month. Stock still sitting on the shelf is not part of it yet.
Landed Cost: The Real Cost Per Unit
Spread every order's extra costs across the units in it.
Delivery per bag: ₱1,800 ÷ 20 = ₱90
Handling per bag: ₱300 ÷ 20 = ₱15
Supplier rebate per bag: ₱25
Landed cost: ₱2,800 + ₱90 + ₱15 − ₱25 = ₱2,880
Priced Off the Price List
Priced Off Landed Cost
₱80 per bag does not sound like much. At 60 bags a month of this one product, it is ₱4,800 a month, or ₱57,600 a year, that never showed up in your margin.
Monthly COGS: What You Actually Sold
Count the shelf at the start and at the end of the month.
Example month, all values at landed cost
| Line | Amount |
|---|---|
| Beginning inventory (Oct 1) | ₱180,000 |
| Purchases during October | +₱200,000 |
| Stock available to sell | ₱380,000 |
| Ending inventory (Oct 31) | −₱170,000 |
| Cost of goods sold | ₱210,000 |
Example figures. This is the same ₱210,000 COGS used in the ₱280,000 month from Lesson 01.
The shop bought ₱200,000 of stock, yet ₱210,000 worth was sold, because part of what sold came from the shelf at the start of the month. Purchases and COGS are not the same number. Treating them as the same makes some months look terrible and others look great.
Why Most Shops Get COGS Wrong
Three habits that make margins look better than they are.
Using the price list as the cost
Delivery, handling and small fees are real costs of every unit. Leave them out and every margin you calculate is too high.
Counting purchases as this month's cost
A big restock in one month is not a bad month. The cost belongs to the month the stock actually sells.
Never counting the shelf
Without a beginning and ending stock count, monthly COGS is a guess. A quick count once a month is enough to start.
Build Your Landed Cost Sheet
Start with five products. It takes less than an hour.
Pick your top 5 products
Choose the items you reorder most often. They drive most of your COGS.
Pull the last invoice for each
Note the supplier price, units in the order, delivery fee and any handling cost.
Spread the fees per unit
Divide delivery and handling by the units in the order, then subtract any rebate per unit.
Compare against your shelf price
Check each margin against landed cost. Products that slipped below your target need a new price.
Copy this: landed cost sheet
| Product | Supplier price | Fees per unit | Rebate | Landed cost |
|---|---|---|---|---|
| Product 1 | ₱ ____ | ₱ ____ | ₱ ____ | ₱ ____ |
| Product 2 | ₱ ____ | ₱ ____ | ₱ ____ | ₱ ____ |
| Product 3 | ₱ ____ | ₱ ____ | ₱ ____ | ₱ ____ |
| Product 4 | ₱ ____ | ₱ ____ | ₱ ____ | ₱ ____ |
| Product 5 | ₱ ____ | ₱ ____ | ₱ ____ | ₱ ____ |
Fees per unit = (delivery fee + handling) ÷ units in the order.
Every Supplier Adds Its Own Hidden Costs
Landed cost gets harder with every invoice.
Each supplier has its own delivery fee, minimum order and payment method, so the same ₱80 gap shows up in a different shape on every invoice. The more suppliers you buy from, the harder your real cost is to see.
How Tail Stocks helps
Tail Stocks lets pet shops order from multiple suppliers in one place, with one order, one delivery and one payment, at the suppliers' own wholesale prices.
Instead of spreading several delivery fees across several invoices, you have one order to cost out. That makes your landed cost, and your real margin, much easier to see.
Key Takeaways
- COGS is the cost of what you sold, not everything you bought.
- Landed cost = Supplier price + Delivery and handling per unit − Rebates per unit.
- Monthly COGS = Beginning inventory + Purchases − Ending inventory.
- An ₱80 gap per bag on 60 bags is ₱4,800 a month of margin you never saw.
- Price and measure margins against landed cost, never the price list.
The supplier price list is where cost starts, not where it ends. Owners who track landed cost price with confidence, because they know exactly what every bag on the shelf cost them.
Know your real cost, and every margin you calculate becomes a number you can trust.
Fewer invoices, clearer costs
Order from multiple pet suppliers in one place, with one delivery and one payment.
Create your Tail Stocks account
Your supplier's price list says ₱2,800 for a 15kg bag. You sell it for ₱3,300. That is ₱500 a bag, or so it seems.
Then the delivery fee shows up on the invoice. The helper who unloads the truck needs to be paid. The rebate the supplier promised comes off the next order instead of this one. By the time the bag sits on your shelf, it cost more than the price list said.
That gap is exactly what cost of goods sold, or COGS, is meant to capture. Get it right, and every pricing and profit decision after it gets easier.
What Is COGS?
The cost of what you sold, not of what you bought.
Cost of goods sold (COGS) is what the products you actually sold during a period cost you, including the cost of getting them onto your shelf. It is the second line of the profit formula from Lesson 01: Sales − COGS − Operating Expenses.
Supplier Price
What the price list or invoice says per unit. Most owners stop here, which is why margins look better on paper than in the bank.
Landed Cost
Supplier price plus delivery and handling per unit, minus any rebates. What one unit truly costs once it is on your shelf.
Monthly COGS
The landed cost of everything that actually sold this month. Stock still sitting on the shelf is not part of it yet.
Landed Cost: The Real Cost Per Unit
Spread every order's extra costs across the units in it.
Delivery per bag: ₱1,800 ÷ 20 = ₱90
Handling per bag: ₱300 ÷ 20 = ₱15
Supplier rebate per bag: ₱25
Landed cost: ₱2,800 + ₱90 + ₱15 − ₱25 = ₱2,880
Priced Off the Price List
Priced Off Landed Cost
₱80 per bag does not sound like much. At 60 bags a month of this one product, it is ₱4,800 a month, or ₱57,600 a year, that never showed up in your margin.
Monthly COGS: What You Actually Sold
Count the shelf at the start and at the end of the month.
Example month, all values at landed cost
| Line | Amount |
|---|---|
| Beginning inventory (Oct 1) | ₱180,000 |
| Purchases during October | +₱200,000 |
| Stock available to sell | ₱380,000 |
| Ending inventory (Oct 31) | −₱170,000 |
| Cost of goods sold | ₱210,000 |
Example figures. This is the same ₱210,000 COGS used in the ₱280,000 month from Lesson 01.
The shop bought ₱200,000 of stock, yet ₱210,000 worth was sold, because part of what sold came from the shelf at the start of the month. Purchases and COGS are not the same number. Treating them as the same makes some months look terrible and others look great.
Why Most Shops Get COGS Wrong
Three habits that make margins look better than they are.
Using the price list as the cost
Delivery, handling and small fees are real costs of every unit. Leave them out and every margin you calculate is too high.
Counting purchases as this month's cost
A big restock in one month is not a bad month. The cost belongs to the month the stock actually sells.
Never counting the shelf
Without a beginning and ending stock count, monthly COGS is a guess. A quick count once a month is enough to start.
Build Your Landed Cost Sheet
Start with five products. It takes less than an hour.
Pick your top 5 products
Choose the items you reorder most often. They drive most of your COGS.
Pull the last invoice for each
Note the supplier price, units in the order, delivery fee and any handling cost.
Spread the fees per unit
Divide delivery and handling by the units in the order, then subtract any rebate per unit.
Compare against your shelf price
Check each margin against landed cost. Products that slipped below your target need a new price.
Copy this: landed cost sheet
| Product | Supplier price | Fees per unit | Rebate | Landed cost |
|---|---|---|---|---|
| Product 1 | ₱ ____ | ₱ ____ | ₱ ____ | ₱ ____ |
| Product 2 | ₱ ____ | ₱ ____ | ₱ ____ | ₱ ____ |
| Product 3 | ₱ ____ | ₱ ____ | ₱ ____ | ₱ ____ |
| Product 4 | ₱ ____ | ₱ ____ | ₱ ____ | ₱ ____ |
| Product 5 | ₱ ____ | ₱ ____ | ₱ ____ | ₱ ____ |
Fees per unit = (delivery fee + handling) ÷ units in the order.
Every Supplier Adds Its Own Hidden Costs
Landed cost gets harder with every invoice.
Each supplier has its own delivery fee, minimum order and payment method, so the same ₱80 gap shows up in a different shape on every invoice. The more suppliers you buy from, the harder your real cost is to see.
How Tail Stocks helps
Tail Stocks lets pet shops order from multiple suppliers in one place, with one order, one delivery and one payment, at the suppliers' own wholesale prices.
Instead of spreading several delivery fees across several invoices, you have one order to cost out. That makes your landed cost, and your real margin, much easier to see.
Key Takeaways
- COGS is the cost of what you sold, not everything you bought.
- Landed cost = Supplier price + Delivery and handling per unit − Rebates per unit.
- Monthly COGS = Beginning inventory + Purchases − Ending inventory.
- An ₱80 gap per bag on 60 bags is ₱4,800 a month of margin you never saw.
- Price and measure margins against landed cost, never the price list.
The supplier price list is where cost starts, not where it ends. Owners who track landed cost price with confidence, because they know exactly what every bag on the shelf cost them.
Know your real cost, and every margin you calculate becomes a number you can trust.
Fewer invoices, clearer costs
Order from multiple pet suppliers in one place, with one delivery and one payment.
Create your Tail Stocks account