What counts as cost? (quick definitions)
What you’ll learn
A simple way to think about costs in D2C Lab so your Net Profit stays realistic.
You’ll see:
the most common cost types (with plain-English definitions)
what to include early (even if you’re estimating)
what to keep separate (optional)
The core rule
A “cost” is anything that reduces what you take home per sale.
If you want your Net Profit to be meaningful, include the costs that happen every time you sell one unit.
The 4 main cost buckets
1) Product cost (COGS)
These are the costs required to manufacture or buy the unit.
Common examples:
supplier unit cost
basic packaging cost
inserts/labels (if you include them per unit)
2) Landing / logistics cost (landed cost)
These are the costs to get the unit to the place where it can be sold.
Common examples:
freight/shipping to warehouse
customs/duty (if applicable)
handling/forwarder charges
Tip: If you don’t know landed cost yet, use a simple estimate per unit and refine later.
3) Platform + fulfilment fees
These are marketplace or payment-related fees that happen when you sell.
Common examples:
marketplace referral fee
fulfilment fee (FBA/3PL)
payment processing fee
closing/variable fees (if your marketplace has them)
4) Marketing cost (per unit)
This is what you pay to generate the sale.
Common examples:
ads cost per conversion (estimated)
promo/launch cost per unit
Important: Even if you’re early, add a marketing estimate so profit isn’t overstated.
Costs people forget (but should usually include)
packaging (if you upgrade it)
returns allowance (if returns are common in your category)
ad spend (even a small amount)
What you can keep separate (optional)
These are real expenses, but you may choose not to include them in per-unit net profit (depends on how you model):
software subscriptions (fixed monthly)
salaries/contractor costs
rent/office costs
one-time tooling or design fees
If you want to include fixed costs, a simple approach is:
convert them into a “per-unit” estimate based on expected monthly sales
A quick checklist for “Should I include this?”
Ask:
Does it happen per unit sold?
Will it reduce cash from each sale?
If yes → include it.
If no → optional (or track separately).
Best practices
Start with estimates, then refine after supplier quotes.
Always include at least one realistic marketing cost line.
Don’t aim for perfect accuracy in the first draft — aim for directionally correct.
Related articles
Model profitability (Calculator)
Where your numbers come from (quick overview)
Fix: Net profit not updating in Master List