What counts as COGS for a furniture 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 a furniture or home store, the product is only part of it. Getting a large item from the factory to a customer's room, intact, can cost as much as the item itself.

What goes in

Cost	Count it?	Why
Product cost from the factory or supplier	Yes	The base of unit cost
Ocean or inbound freight and duty	Yes	Large for bulky goods, and part of landed cost
Storage charged per unit by a warehouse or 3PL	Yes, as an allowance per unit	Bulky stock takes space for as long as it sits
Protective packaging	Yes	Per unit, and substantial for large items
Parcel shipping you pay on small items	Yes	Scales with orders
Freight or two-person delivery on large items	Yes	Set by size and weight, not price
Assembly or installation you provide	Yes	A per-order labour cost
Payment processing fees	Yes	A share of every order
Damage: replacement parts, re-delivery, goodwill discounts	Yes, spread across orders	Paid after the sale
Return freight on bulky items	Yes, spread across orders	A second delivery in reverse
Showroom rent and staff	No	Overhead
Photography, 3D renders, room sets	No	Paid once per product
Google Ads spend	No	It's what POAS divides by

Building one order's cost

The sofa's delivery alone costs more than its freight, packaging and damage allowance combined. That is why furniture stores need to cost every product by delivery band, not just by what the factory charged.

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. This only works for a store whose products all ship the same way. It misleads once parcel-shipped decor sits alongside freight-delivered furniture.

T2: margin by category (labelled "approximate")

A margin per delivery band as well as product type: small decor, medium parcel items, large freight items, items with assembly. For furniture, the delivery band can matter more than the product category.

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

Shopify's Cost per item field, per variant, read directly. Sizes and configurations of the same piece, such as a two-seat and a three-seat sofa, have different product and delivery costs, so each needs its own figure.

Reading the benchmark above

The figure above is an industry figure: cost of goods was 69.72% of sales across 27 US-listed home furnishings companies in Damodaran's January 2026 data. The group mixes furniture makers such as La-Z-Boy, Ethan Allen and Lovesac with appliance and flooring companies such as Whirlpool, SharkNinja and Mohawk. These are manufacturers selling at their own scale, so treat the figure as a reference point, not a target.

Common COGS mistakes in furniture and home

• Leaving delivery out of cost of goods. On large items it can be the biggest cost after the product.
• Ignoring damage. Replacement parts and re-deliveries are part of what each order costs.
• Using one margin for decor and furniture. Delivery makes their real margins very different.