Should cost per item include shipping, packaging, duties and fees?
Shopify defines cost per item as what you paid for the product, excluding taxes, shipping and other costs. Add the costs of getting the goods to your shelf if you want Shopify's profit reports to reflect them. Keep the costs of selling out of it and track them beside it.
Updated
- Unit cost · Supplier AIn Shopify's cost per item$21.40
- Packaging · Per unitIn Shopify's cost per item$1.20
- Pick and pack · Per unit, whole shopKept in Cogsy only$2.85
- Payment processing · 2.9% of priceKept in Cogsy only$1.97
Two questions, two numbers
“What does this product cost?” has two useful answers.
- What it cost to get onto the shelf. Purchase price, inbound freight, duty, product packaging. This is the cost of the goods, the basis of gross profit and of inventory value.
- What a sale of it costs in total. All of the above plus fulfilment, payment fees, shipping you absorb and returns. This is the basis of contribution margin and of pricing decisions.
Shopify gives you one field. It feeds gross profit and inventory value, so it suits the first answer. The second needs somewhere else to live.
Cost by cost
| Cost | In cost per item | Why |
|---|---|---|
| Supplier price | Yes | It is the field’s definition |
| Inbound freight | Usually | Part of what the stock cost you |
| Import duty | Usually | Same |
| Product packaging | Usually | Part of the product as sold |
| Inserts and labels | Sometimes | Yes if attached to the product |
| Shipping packaging | Rarely | Depends on the order, not the product |
| Pick and pack | Rarely | A cost of fulfilling a sale |
| Outbound shipping | Rarely | Shopify’s net sales exclude shipping too |
| Payment processing | No | A percentage of price |
| Returns allowance | No | An estimate, not a cost of the goods |
| Advertising | No | Not tied to a unit |
“Usually” means it is standard accounting practice to treat it as part of inventory cost. Your accountant’s policy decides; apply it the same way every period.
What changes when you add to the field
Take a throw priced at $68.00 with a supplier price of $19.00 and $2.40 of freight, duty and handling.
| Cost per item holds | Shopify margin | Inventory value, 400 units |
|---|---|---|
| $19.00 | 72.1% | $7,600 |
| $21.40 | 68.5% | $8,560 |
Neither is an error. The second is closer to what the stock cost.
Be consistent
A catalog where some products carry freight in their cost and others do not cannot be compared. Decide the rule once and write it down. If you change it, change every product on the same date.
Keeping both numbers
Shopify has no native way to hold extra costs beside the field; its own guidance points to third-party apps for landed cost. In Cogsy each cost is its own kind, and each kind is either included in the figure written to Shopify or kept beside it. You get the cost of goods in Shopify and the full cost of a sale in Cogsy, from one set of entries.
Questions
- What does Shopify say cost per item should be?
- Its help center describes it as the price you paid the manufacturer, excluding taxes, shipping or other costs, or the labour and material cost if you make the product.
- Will adding freight to cost per item cause problems?
- No. It is a number you control. It lowers the margin and gross profit Shopify reports, and raises inventory value at cost, by the amount you add.
- Should I add payment fees to cost per item?
- No. They are a percentage of the price and a cost of selling, and the field holds one fixed amount.
Sources
Related
Cost types
Cost typesThe costs merchants add on top of the unit cost, one by one.
Feature
Costs on top of the unit costPackaging, fulfilment or duties per unit, or fees as a percentage of the price, for a variant, a product or the whole shop.
Guide
Landed cost in Shopify after StockyStocky ended on 31 August 2026 and Shopify purchase orders do not change cost per item. How to keep a landed cost per unit in Shopify now, by hand or with an app.
Glossary
Contribution marginContribution margin is the price minus every cost that varies with a sale, including fulfilment and payment fees. The formula and a worked ecommerce example.