Cost Management
COGS Decay
Definition
The gradual divergence between the COGS data used in pricing/checkout systems and actual supplier costs, leading to margin miscalculation.
By Herzel MishelFounder, AgentisLast reviewed
COGS decay occurs when the cost of goods sold data in your commerce or checkout system becomes stale relative to actual supplier costs. This happens naturally as supplier prices change, raw material costs fluctuate, manufacturing costs shift, or negotiated pricing tiers expire. For merchants who update COGS quarterly or monthly, the gap between system COGS and real COGS can grow quickly — meaning every profit calculation during that period is wrong. COGS decay is particularly dangerous for subscription commerce where product costs change but billing remains static. Real-time ERP synchronization (e.g., Agentis’s NetSuite integration via Celigo) addresses COGS decay by using live cost data for every order it evaluates.
Sources
Related Terms
Margin Analysis
Checkout Margin Erosion
The loss of profit margin that happens when an order is priced at checkout, caused by unmonitored discount stacking, freight cost miscalculation, FX fluctuations, and stale COGS data.
Margin Analysis
Margin Intelligence
Real-time visibility into per-order, per-SKU, and per-channel profitability using live data from ERP, logistics, and FX systems.
Cost Management
Landed Cost
The total cost of a product delivered to the customer, including COGS, freight, duties, tariffs, insurance, and handling fees.
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