Optimizing BigCommerce Pricing with COGS Management: A Smart Approach to Profitable Ecommerce

Making money, not just making sales, is key to ecommerce success. BigCommerce offers great tools to grow your store, but to increase profits, it’s important to look beyond prices and understand your cost of goods sold (COGS). To get the most out of your store, consider hiring experts—hire BigCommerce developers who can help optimize your pricing and overall store performance.

COGS management is an essential component of any pricing strategy. It helps you understand exactly how much it costs to deliver a product to your customer, enabling smarter decisions around pricing, promotions, and margins. In this guide, we’ll explore how you can optimize pricing in BigCommerce by effectively managing COGS, ensuring your business remains sustainable, scalable, and profitable.

What Is COGS and Why It Matters

Cost of Goods Sold (COGS) refers to the direct costs associated with producing or purchasing the products you sell. This includes:

• Raw materials

• Manufacturing or production costs

• Packaging

• Shipping (to your warehouse or fulfillment center)

• Supplier charges

Knowing your COGS helps you determine gross profit margins, assess product performance, and identify areas where cost-cutting or price adjustments are necessary.

Formula:
Gross Profit = Revenue – COGS

If you price a product too low relative to its COGS, your business might grow in revenue but lose money on every sale. On the other hand, if your prices are too high, you may lose customers to competitors.

Benefits of Managing COGS in BigCommerce

1. Informed Pricing Strategy

By tracking COGS within BigCommerce or via integrated apps, merchants can price products based on actual costs rather than assumptions. This ensures you maintain healthy margins while staying competitive.

2. Improved Profitability

Monitoring COGS allows for better cost control. Whether it’s identifying expensive suppliers, inefficient shipping practices, or rising material costs, COGS analysis helps you make decisions that directly impact profitability.

3. Better Inventory Decisions

Knowing the profit margin for each product helps determine which items to stock more of, which to discount, and which to discontinue. It allows for smarter inventory planning based on profitability, not just sales volume.

4. Real-time Insights

With tools that integrate COGS data into your BigCommerce dashboard, you gain real-time visibility into how much you’re earning on every sale after costs—essential for high-volume sellers.

How to Track and Manage COGS in BigCommerce

BigCommerce doesn’t include built-in COGS tracking by default, but it supports integrations with various inventory, accounting, and ERP tools. Here are a few ways to manage COGS effectively:

1. Use Inventory Management Integrations

Apps like TradeGecko (QuickBooks Commerce), Cin7, or DEAR Systems integrate with BigCommerce and help track COGS automatically based on inventory movements and supplier pricing.

2. Accounting Software Integration

Connect platforms like QuickBooks, Xero, or NetSuite to sync your product costs and sales, helping you calculate gross profit and make strategic decisions based on financial data.

3. Custom COGS Fields

For a DIY approach, you can use BigCommerce’s product custom fields or metafields to store cost data manually. This works for smaller catalogs but is less scalable.

4. Analytics Tools

Advanced analytics solutions like Glew.io or Lifetimely can pull in COGS data and help visualize profit margins, customer lifetime value (LTV), and other profitability metrics.

Optimizing Pricing Based on COGS

Once you have accurate COGS data, you can start refining your pricing strategy. Here’s how:

1. Set Margin-Based Pricing Rules

Use a formula-based approach like:

Price = COGS + (COGS x Desired Margin Percentage)

For example, if a product costs you $20 and you want a 50% margin, price it at $30.

2. Segment Pricing by Product Type

Not all products need the same margin. High-ticket items may support lower margins, while niche accessories can afford higher markups. Adjust your pricing rules accordingly.

3. Adjust Pricing by Channel

If you’re selling across multiple channels (Amazon, eBay, Instagram), factor in additional fees and shipping costs. COGS-based pricing helps you maintain margins even when platform costs vary.

4. Use Dynamic Pricing Tools

Some BigCommerce-compatible apps allow dynamic pricing based on inventory levels, demand, or competitor pricing—all while factoring in your product cost to maintain profitability.

Real-World Example

Let’s say you sell eco-friendly water bottles that cost you $8 each (including packaging and shipping). You want a minimum 40% profit margin:

Target Price = $8 + ($8 x 0.40) = $11.20

With this baseline, you can experiment with discounts or bundles, knowing that anything above $11.20 still maintains your margin.

Now, if your supplier increases costs to $9, your pricing needs to be adjusted to maintain profitability:

New Price = $9 + ($9 x 0.40) = $12.60

COGS tracking helps you make such changes quickly and confidently.

Best Practices for Managing COGS on BigCommerce

• Audit COGS regularly to account for changing supplier prices or shipping costs.

• Automate where possible using integrated tools that sync cost and inventory data.

• Bundle smartly by calculating the COGS of kits or product combinations.

• Monitor gross profit per SKU to see which products drive profits, not just sales.

• Plan for seasonal changes where supply chain or cost disruptions can affect margins.

Final Thoughts

COGS management is a foundational element of ecommerce success—especially on platforms like BigCommerce, where merchants have access to powerful integrations and analytics. By understanding and tracking your true product costs, and leveraging expert BigCommerce development services, you gain the ability to price smarter, sell more profitably, and scale your business with confidence.

In an era where customer acquisition costs are rising, it’s no longer enough to focus solely on revenue. With optimized pricing strategies based on accurate COGS, your BigCommerce store can grow sustainably while keeping profit margins healthy.

Need help integrating COGS tracking into your BigCommerce store? Consider partnering with an ecommerce development agency or consultant to implement a solution tailored to your business.