Beauty & Skincare: POAS, COGS and margin benchmarks
Beauty products can carry high margins. e.l.f. Beauty, one listed mass-market brand, reported cost of sales at 29.3% of net sales in its fiscal year to March 2026. But samples, gifts with purchase, stacked discount codes and returns that can't go back on the shelf take a share of individual orders that ROAS never sees, while customers who reorder add value a first-order view misses. The pages below cover what a healthy return looks like, what belongs in a beauty brand's cost of goods, and how to scale spend on customers who come back.
The questions, with sourced numbers
- What's a healthy POAS?
What POAS beauty and skincare stores need on Google Ads once samples, gifts with purchase and discount stacking are counted against first-order profit.
2.81Median Google Ads ROAS - What counts as COGS?
Formula, packaging, samples, testers and expired stock: which beauty and skincare costs belong in COGS when measuring POAS, and which are overhead.
29.3%COGS as a share of sales (one company) - How do you scale spend profitably?
A step-by-step way to scale Google Ads for a beauty brand on profit: fund hero SKUs, separate new from returning customers, and price for replenishment.
97.5%First-time subscribers who reorder
Background reading
- What Is POAS (Profit on Ad Spend)? Full Definition
- ROAS vs POAS: Which Metric Should You Actually Use?
- ROAS vs POAS: The Metric Killing Your Shopify Profits
- How to Calculate Break-Even ROAS (With a Worked Example)
- Shopify COGS Setup: How to Track Cost of Goods Sold
- Google Ads for Shopify: The Complete Profitability Guide
- Wasted Ad Spend in Google Ads: How to Find and Fix It