What counts as COGS for an electronics store

For measuring POAS, "cost of goods" means every cost that scales with each order you sell. Ad spend is not included, because it's the other side of the ratio. For an electronics store, the purchase price is the big number, but the costs that decide whether an order makes money are the smaller ones around it: duty, fees, fraud, warranty and the value lost when a device comes back opened.

What goes in

Cost	Count it?	Why
Purchase price from the brand or distributor	Yes	The base of unit cost
Factory cost of own-brand products	Yes	The base for your own range
Import duty and tariffs	Yes	Part of landed cost, and can change with trade policy
Inbound freight	Yes	Part of landed cost
Pick, pack and insured shipping you pay	Yes	High-value parcels may need insurance or signature
Payment processing fees	Yes	A percentage, so larger on large orders
Chargebacks and fraud losses	Yes, as an allowance per order	High-value, resellable goods can attract fraud
Warranty repairs and replacements you cover	Yes, as an allowance per unit	Paid after the sale
Value lost on returned, opened devices	Yes, spread across orders	Resold as open-box or refurbished
Testing and restocking returned units	Yes, spread across orders	Labour on every return
Product certification for your own devices	No	Paid once per product
Product development	No	Paid once, not per order
Google Ads spend	No	It's what POAS divides by

Building one order's cost

The earbuds bring in eight times the revenue and leave $34. The cable leaves $16. That's why accessories can decide whether an electronics store is profitable, and why they need their own targets.

Three levels of accuracy

Selvra OS works with three tiers of cost data and shows which one a figure is based on.

T1: one flat margin (labelled "estimated")

One percentage for the whole range. For an electronics store this misleads almost at once, because devices and accessories carry very different margins.

T2: margin by category (labelled "approximate")

A margin per product type: devices by brand, own-brand accessories, cables and chargers, refurbished stock. Separate refurbished and open-box stock too, since it carries a different cost from new.

T3: cost per product (labelled "verified" once synced)

Shopify's Cost per item field, per variant, read directly. Storage and colour variants of the same device can have different purchase prices, so each needs its own cost.

Reading the benchmark above

The figure above is an industry figure from a small sample: cost of goods was 61.23% of sales across only eight US-listed consumer electronics makers, including GoPro, Sonos and Koss, in Damodaran's January 2026 data. These companies make their own products. A store reselling other brands' devices pays a price that already includes the maker's margin, so its cost share on the same retail price will be higher. Treat the benchmark as a reference point, not a target.

Common COGS mistakes in electronics

• Stopping at the purchase price. Fees, fraud and returns can decide the order.
• Treating returns as refunds only. An opened device loses value even when it's resold.
• Using one margin for devices and accessories.