Cost per item in Shopify: what it is and what depends on it
Cost per item is one optional number on each variant. Shopify's margin, profit, cost of goods sold and inventory value figures all come from it, and Shopify only reports profit for variants that had it set when they sold.
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What the field is
Each variant in Shopify has one cost per item. Shopify’s help center describes it as what the product costs you: for a reseller, the price paid to the manufacturer excluding taxes, shipping and other costs; for a maker, the labour and material cost. It is stored in your store’s currency and it is optional.
How to set it for one product
- In the Shopify admin, go to Products and open the product.
- In the Price section, click Cost per item.
- Enter the amount in the Cost field and save.
If the product has variants, open each variant and repeat. To do many at once, see bulk updating cost per item.
What depends on it
| Where | What Shopify calculates |
|---|---|
| Product page | Projected profit and margin: (price − cost) ÷ price |
| Profit reports | Gross profit and margin by product, variant, order, POS location and market |
| Finance reports | Cost of goods sold and the gross profit breakdown |
| Inventory reports | Month-end inventory value: cost per item × quantity |
Two details matter more than the rest:
- Profit is reported only for variants that had a cost when they were sold. Sales of a variant with no cost are not treated as free; they are left out of gross profit and listed as net sales without cost recorded.
- The cost is recorded at the time of the sale. Shopify notes that because the field is static, profit report data is only relevant to a point in time.
What one static field cannot do
Shopify describes cost per item as a single static field. That has four consequences:
- No history. When you change the cost, the previous value is not kept on the product. See keeping a cost history.
- One cost only. There is no place for a second supplier’s price. See one product, two suppliers.
- Nothing on top. Freight, duty, packaging and fees are either added into the number or left out. See what to include.
- No automatic updates. Receiving a purchase order or a transfer does not change it. See purchase orders and cost.
Keeping it right
The field is easy to fill in once and hard to keep current. The usual failures are new variants created without a cost, and costs that were correct when entered and never revisited. A periodic check for variants with no cost catches the first. A dated record of each change catches the second.
Questions
- Where is cost per item in Shopify?
- On the product's page, in the Price section. For a product with variants, open each variant; the cost is set per variant.
- Can staff see cost per item?
- Only with the "View cost" permission. Editing it needs "Edit cost". The general product permissions do not include either.
- Does cost per item affect my prices or what customers see?
- No. It is internal and changes nothing on the storefront.
- What happens if I leave cost per item empty?
- Nothing breaks, but the variant is left out of Shopify's profit reports, and its sales are shown as net sales without cost recorded.
Sources
Related
Guide
How to bulk update cost per item in ShopifyThree ways to update cost per item for many Shopify variants at once: the bulk editor, a product CSV import, or an app. Steps and pitfalls for each.
Guide
Should cost per item include shipping, packaging, duties and fees?Shopify defines cost per item as the purchase price alone. Which extra costs to add to it, which to keep out, and a cost-by-cost table to decide.
Guide
What happens to past orders when you change a cost in ShopifyShopify records cost at the time of sale. What that means for old orders when you change cost per item, for orders sold with no cost, and what you can do about it.
Glossary
Cost per itemCost per item is the field where Shopify stores what a variant costs you. What Shopify means by it, what uses it, and what the single field cannot hold.