In a world of shrinking margins and rising costs, reducing COGS (cost of goods sold) can feel like walking a tightrope. Cut too much, and product quality suffers. Cut too little, and your profit potential stays flat.
The secret? Know exactly what your customer values — and ruthlessly cut everything else.
This blog breaks down five proven ways to reduce COGS without negatively impacting the customer experience or brand perception.
1. Change Materials Without Losing Quality
Material swaps can save big — if done thoughtfully.
✅ Example: Switch from metal to high-durability plastic where function isn’t compromised.
✅ Example: Move from custom-milled fabric to an in-stock textile with similar feel and longevity.
Tip: Always test perceived value before making a switch. If the customer can’t see or feel the difference, it’s a win.
2. Remove Redundant Components
Often, products include more than necessary — especially if they’ve evolved over time.
✅ Example: Go from two internal speakers to one, if sound quality remains strong.
✅ Example: Eliminate unnecessary zippers, inserts, or redundant layers.
Cutting redundancy simplifies manufacturing, reduces assembly time, and improves margins — without changing how the product is used or experienced.
3. Optimize for Freight & DIM Weight
Small changes in size or weight can unlock big savings.
✅ Example: Shrinking from 53 lbs to 49 lbs can move you into a lower shipping bracket.
✅ Example: Reducing box dimensions can cut both material and freight costs — especially in air or international shipping.
This is one of the fastest and most overlooked ways of reducing COGS, particularly for heavy or bulky products.
4. Shift Country of Origin
Tariffs and labor costs can significantly impact landed COGS.
✅ Example: Move production from China (with 25% tariffs) to Mexico or Vietnam for tariff-free access to the U.S.
✅ Example: Explore partners in CAFTA or USMCA trade zones.
Important: Always vet suppliers thoroughly. A cheaper unit cost doesn’t matter if QC or lead times suffer.
5. Change Shipping Mode Strategically
Freight mode plays a major role in landed cost.
✅ Example: Move from air freight to ocean or consolidated LCL for slower, more affordable delivery.
✅ Example: Use hybrid models — ocean for base demand, air for spikes.
Reducing your reliance on premium freight is one of the most powerful long-term COGS levers — but requires strong planning and forecasting.
Final Thought: COGS Optimization is About Tradeoffs
Every brand wants to reduce costs without hurting quality. The trick is knowing:
- What customers truly value
- What’s operationally redundant
- Where tradeoffs are invisible (or even appreciated)
Reducing COGS isn’t about cutting corners — it’s about cutting noise.
Need help reducing COGS in a way that protects your brand and customer experience?
Izba helps companies lower costs through better sourcing, freight strategy, and operational optimization. Let’s talk.
