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COS (Cost of Sale) Solver
Calculated Result
COS (Cost of Sale) = (spend / revenue) * 100
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Target Logic: COS (Cost of Sale)
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What is COS (Cost of Sale)?
COS (Cost of Sale) is the inverse of ROAS — expressed as a percentage of revenue. It tells you what fraction of each sale you're spending on advertising. Lower COS means more efficient advertising relative to total revenue.
Worked Example
A campaign spends $10,000 and generates $80,000 in revenue. COS = ($10,000 ÷ $80,000) × 100 = 12.5%. If your gross margin is 40%, a 12.5% COS leaves 27.5% for other business costs and profit.
Related ECOMMERCE Metrics
ROAS
ROAS (Return on Ad Spend) measures how much revenue you generate for every dollar spent on advertising. It's the fastest signal of campaign revenue efficiency and is widely used to optimize and scale direct-response campaigns.
LTV (Lifetime Value)
LTV (Lifetime Value) predicts the total revenue a single customer will generate over their entire relationship with your brand. It's the single most important input for deciding how much you can afford to spend on customer acquisition.
Add-to-Cart Rate
Add-to-Cart Rate measures how many ad clicks result in a product being added to the shopping cart. It's a mid-funnel signal that indicates product appeal, pricing competitiveness, and landing page quality.
CAC
CAC (Customer Acquisition Cost) measures the total cost of acquiring one new customer — including all marketing and sales spend. Comparing CAC to LTV tells you whether customer relationships are profitable over time.
Expert Insights
How do I improve my COS (Cost of Sale)?
Improving COS (Cost of Sale) requires a dual focus on quality and efficiency. For ECOMMERCE metrics, we recommend auditing your top-performing segments and re-allocating budget from underperforming areas to those with higher baseline COS (Cost of Sale) potential.
Is COS (Cost of Sale) a primary KPI?
While COS (Cost of Sale) is a critical indicator of regional performance, it should always be viewed alongside downstream metrics like ROI to ensure volume isn't coming at the expense of profitability.