Cost of goods sold (COGS) is the direct cost of producing each item you sell. Knowing your COGS is the foundation of accurate pricing and real profit — yet many shops only guess at it.
What Goes Into Embroidery COGS
- •The blank (garment or item)
- •Thread and bobbin used
- •Stabilizer and backing
- •Direct labor to produce the piece
- •A share of machine wear and consumables
What COGS Excludes
COGS is direct production cost. It excludes overhead like rent, marketing, and software — those are separate operating expenses you cover with your gross margin.
Calculate It Per Product
- 1Add the blank cost
- 2Add thread, bobbin, and stabilizer for that design
- 3Add labor time at your hourly rate
- 4Total = your COGS for that item
Use COGS to Price
Your selling price must exceed COGS by enough to cover overhead and profit. If you do not know COGS, you are pricing blind.
Reduce input costs — digitize designs free:
Open the Converter →Know It Per Item
Calculate COGS for each product you sell. Averages hide the items that quietly lose money.
COGS is the bedrock of profitable pricing. Add up the blank, materials, and labor for each item, then price well above it to cover overhead and earn real profit.