# Cost per item

> Cost per item is what you paid for one unit, stored on the variant so Shopify can work out margin and stock value.

- Source: https://storestandards.com/glossary/cost-per-item/
- Also called: COGS
- Updated: 2026-08-14
- Author: Priya Raghunathan, Founder, engineer, Store Standards

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It sits under the price on every variant, and it is the one field most stores
leave empty.

## What Shopify does with it

- Margin, shown next to the price as you type
- Profit columns in the sales reports
- Stock value on the inventory reports
- Cost of goods sold, which is what
  [inventory turnover](https://storestandards.com/glossary/inventory-turnover/) is built from

None of those work without it. They do not warn you either. They show zero, or
they show a margin of 100%.

## Put the landed figure in

Not the invoice price. The [landed cost](https://storestandards.com/glossary/landed-cost/), with freight
and duty spread across the units.

A jacket invoiced at £22 that lands at £27 reports an eleven-point better
margin than it earns, and eleven points is the difference between a line worth
reordering and one that funds your courier.

## Where it goes wrong

The cost is set once at launch and never touched. Suppliers raise prices,
currency moves, freight doubles, and the reports keep quoting a number from
two years ago.

The other one is expecting a fix to reach backwards. Old orders keep the cost
that was stored when they were placed, which is correct. It also means last
quarter's margin report will not move, whatever you correct on the
[inventory item](https://storestandards.com/glossary/inventory-item/) today.

## Related terms

- [Landed cost](https://storestandards.com/glossary/landed-cost/): Landed cost is what a unit of stock cost by the time it reached your shelf, including freight, duty and handling.
- [Inventory item](https://storestandards.com/glossary/inventory-item/): An inventory item is the countable half of a variant. Stock levels attach to it, one per location, not to the variant itself.
- [Inventory turnover](https://storestandards.com/glossary/inventory-turnover/): Inventory turnover is how many times you sell and replace your stock in a year. Higher means your money is working harder.