Shopify Inventory Cost Report

Managing profitability in your Shopify store involves more than tracking ad spend and shipping fees; your inventory costs play a critical role. If you’re overlooking them, your profit margins may not reflect the true health of your business.

That’s where the Shopify Inventory Cost Report comes in. This powerful report gives you visibility into how much you’re spending on your products, enabling smarter pricing decisions, more strategic purchasing, and accurate profit tracking.

Why Inventory Costs Matter

Inventory cost is the total amount spent to acquire the products you sell. Neglecting this cost can distort your profit calculations, throw off pricing strategies, and leave gaps in your financial reporting.

The Inventory Cost Report acts as your financial compas, helping you optimize margins, understand product profitability, and make data-driven decisions that fuel sustainable growth.

Formula:

Inventory Cost = Number of Units Purchased × Cost Per Unit

Inventory Cost Calculation Example

Let’s say Emma runs a Shopify store that sells ceramic planters:

Scenario 1:

• She purchases 20 planters at ₹400 each
  Inventory Cost = 20 × ₹400 = ₹8,000
  

Scenario 2 (bulk order with discount):

• She orders 100 planters at ₹400 each, with a 15% supplier discount
  
  
• Total cost = 100 × ₹400 = ₹40,000
  
  
• Discount = ₹6,000
  
  
• Final Inventory Cost = ₹34,000
  
  
• Inventory Cost per Unit = ₹34,000 ÷ 100 = ₹340
  
  

Tracking this discounted cost per unit allows Emma to adjust retail pricing and understand profit per sale accurately.

Why You Must Track Inventory Cost

With an accurate inventory cost, you can:

• Optimize pricing strategies to protect and grow profit margins
  
  
• Evaluate the financial impact of bulk discounts
  
  
• Understand seasonal stocking costs and optimize reordering
  
  
• Set competitive prices while maintaining profitability
  
  
• Forecast profit based on stock movement
  
  

Even slight changes in supplier pricing or shipping can affect your bottom line, and this report helps you stay one step ahead.

What Is the Purpose of the Inventory Cost Report?

While the previous section explains why tracking matters, this section covers what the report actually helps you do:

• Track inventory costs for accurate budgeting and forecasting
  
  
• Ensure your data supports audit trails and accounting compliance
  
  
• Use inventory cost in profitability calculations
  
  
• Set product prices that factor in true cost plus overhead and competitor pricing

In short, it connects your procurement, pricing, and profitability strategy in one place.

Key Data Fields in the Inventory Cost Report

The report includes:

• Product Title – Product name
  
  
• Variant Title – Variant like size or color
  
  
• SKU – Unique stock-keeping code
  
  
• Product Price – Selling price per unit
  
  
• Inventory Cost – Product cost × quantity in stock
  
  
• Inventory Value – Selling price × inventory quantity
  
  
• Location – Inventory storage location
  
  
• Collections – Groupings/categories of the product
  
  
• Product Status – Active / Draft / Archived status

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 Quick Tip: Use the library search bar to find this report fast, just type “Inventory Cost” in Report Pundit.

Final Thoughts

If you want accurate profits, you need accurate product cost data. The Shopify Inventory Cost Report gives you the clarity to price confidently, manage stock wisely, and protect your bottom line.