What counts as COGS for a jewelry 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 jewelry store, the metal and stones dominate, and the price of the metal can change between the day you make a piece and the day you sell it.

What goes in

Cost	Count it?	Why
Precious metal, at what it would cost to replace	Yes	Metal prices move, and you restock at today's price
Diamonds and gemstones	Yes	Can be the largest single cost in fine jewelry
Manufacturing: casting, setting, finishing	Yes	Per piece, whether in-house or contracted
Plating on fashion jewelry	Yes	Per piece
Grading reports for certified stones	Yes	Paid per stone
Gift box, pouch and presentation packaging	Yes	Part of what the customer pays for
Insured, signed-for shipping you pay	Yes	High-value parcels may need it
Engraving and personalisation	Yes	Labour on every personalised order
Resizing and repairs you cover	Yes, as an allowance per piece	Paid after the sale
Payment processing fees	Yes	A percentage, so larger on large orders
Returns inspection and restocking	Yes, spread across orders	Every returned piece has to be checked
Product design and photography	No	Paid once per design
Showroom rent and staff	No	Overhead
Google Ads spend	No	It's what POAS divides by

Metal at replacement cost

Use what the metal would cost to buy today, not what you paid when you made the piece. Brilliant Earth's annual report notes that "gold, platinum and other precious metal prices have been highly volatile, and significant price increases occurred in 2025", and that if it can't raise retail prices to reflect higher diamond, gemstone or metal costs, its profitability could suffer. A piece costed at last year's metal price will show a margin you can't repeat when you restock.

Building one order's cost

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. It misleads any store that sells both fine and fashion jewelry, because their cost structures have little in common.

T2: margin by category (labelled "approximate")

A margin per product type: fine jewelry by metal, fashion jewelry, engagement and bridal, personalised pieces. Split fine jewelry by metal, since gold and platinum prices move separately.

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

Shopify's Cost per item field, per variant, read directly. Ring sizes and metal choices are variants with different costs, and metal-heavy pieces need their cost updated when metal prices move.

Reading the benchmark above

The figure above is one listed company: Brilliant Earth's cost of sales was 42.5% of net sales in 2025. It is a useful comparison for a Shopify jeweler for one reason: its cost of sales includes more than the product. Its annual report says it covers merchandise costs, inbound freight, the cost of shipping orders to customers, some fulfilment and inventory staff costs, and repair costs. That is close to how POAS should count cost. It is still one fine-jewelry company, so treat it as a reference point, not a target.

Common COGS mistakes in jewelry

• Costing metal at what you paid. Restock at today's price, and cost at it too.
• Forgetting insured shipping and packaging. On jewelry they are part of the product.
• Using one margin for fine and fashion pieces.