Some attributes for Google Shopping feeds serve to make accounting and conversion reporting easier. It’s not always the product features that matter the most and in this article we will examine one such example.
We’ll cover the cost of goods sold attribute: what it measures, how merchants can benefit from it, how to format entries for it, and how to solve potential feed issues.
Read on if you want to learn how to configure costs of goods sold.
This article is part of our Google Product Feed hub.
Table of Contents
What Is the Cost of Goods (COGs) Attribute in the Product Feed?
The input from [cost_of_goods_sold] is used when merchants want to calculate gross profit. Once you add values for this attribute, you can get more accurate reporting about the number of transactions, and the ratio between revenue and profit.
In accounting, cost of goods sold (COGs) refers to direct costs of making the product available for sale, i.e. business costs but not indirect costs like marketing and distribution.
Important note: merchants have to enable item level reporting in Google Shopping for cost of goods sold to work.
Is the cost_of_goods_sold Attribute Required?
No, cost of goods sold is an optional product feed attribute.
It’s meant for those who want to put a finger on gross profit (or total revenue minus costs of goods sold).
Often, the cost of goods sold metric is rounded up or represented by an average value, especially when the cost is not the same for each individual item.
How Is the cost_of_goods_sold Attribute Used in Google Shopping?
You can use the cost of goods sold to calculate profit (it’s often included in income statements along with sales revenue). Within the Google ecosystem, cost of goods sold can serve as an indication of how much profit you made through conversions.
This applies not only to conversions in general, but you can also get detailed reporting on ad leads. Merchants have to enable CwCD reporting or Conversion with Cart Data, otherwise detailed reports won’t be available. What you do with those reports is totally up to you.
For example, sometimes users click on your ads but end up buying another item (not the one shown in the ad). You can find the best performing items (not the ones you believe are bestsellers) by interpreting the CwCD report.
Google can use this data to adjust product pricing, and this allows you to maintain a good margin.
Let’s check the formatting requirements for the cost of goods sold.
Options for Cost of Goods (COGs)
The format for entries for the cost of goods sold is strictly defined, only predefined options are accepted. This format consists of numbers and currency. Obviously, the number represents the amount and the currency has to be provided using the ISO 4217 currency code.
For instance, if the cost of goods sold is 18.93 Swiss Francs the entry will be:
- for text feeds: 18.93 CHF
- for XML feeds: <g:cost_of_goods_sold>18.93 CHF</g:cost_of_goods_sold>
Important note: Please use a dot (“.”) to indicate a decimal point. Don’t use comma (“,”) and don’t provide multiple values, because this attribute is not a repeated field
Also, use the same currency for the cost of goods sold and for the price offered to users at conversion. This will help you get a more accurate calculation.
Let’s check methods for adding this info to a feed.
How To Add cost_of_goods_sold to Your Product Feed
There are two ways to add values for the cost of goods sold: through an eCommerce platform and in Google Merchant Center.
Most eCommerce platforms will have a field for providing COGs, some will even give you instructions on how to calculate it. Once you enter the value, data is shared automatically with your product feed.
Alternatively, you can edit values for [cost_of_goods_sold] using feed rules. This option allows you to select specific items based on shared criteria and the changes will apply to all items in that group, i.e. to each item that satisfies said criteria.
However, if you don’t follow formatting rules when providing values, you may have an issue with that item. Let’s check that out.
Common Problems With the cost_of_goods_sold Attribute
The cost of goods sold is an optional attribute, so Google will not penalize you if the data is not correct (or not provided in an appropriate format), rather you’ll not be able to benefit from detailed reporting.
The most common feed issue with the cost of goods sold attribute is when merchants provide wrong values. To solve the issue, double check the entry to make sure it’s format is number + currency.
For instance, using a currency symbol instead of ISO 4217 currency code can cause such an issue. These issues are easily fixed by complying with Google’s guidelines for formatting the cost of goods sold attribute.
Cost of Goods Sold Can Help in Gaining Valuable Insights
In and of itself, the cost of goods sold is just the amount of money you need to spend to put a product on an online marketplace. It should be fairly easy to calculate this cost.
Google allows you to gain insights into user behavior, and in this context, [cost of goods sold] can help show the items that drive conversions. Activate reporting Conversions with Cart Data, and you will benefit from this type of product data.
It’s easy to format the cost of goods sold, only two types of values are supported: a number (for the amount) and a code (for the currency).
