Start with product used, not product purchased
The most common mistake is calculating COGS from purchase orders. Purchase orders show what came into the practice. COGS has to show what was consumed to deliver a specific treatment.
For injectables, that means units of toxin, milliliters of filler, vials of biostimulator, cannulas, and any other product cost directly tied to the visit. The calculation is only useful when it starts at the point of service.
The basic formula
Treatment COGS equals product quantity used multiplied by the unit cost of that specific product lot. Gross margin equals treatment revenue minus treatment COGS. Gross margin percentage equals gross margin divided by revenue.
If a Botox visit charged $600 and used 40 units at $6.50 per unit, product COGS is $260. Gross margin is $340. Gross margin percentage is 56.7%. That number is very different from revenue, and it is the number owners need for pricing and provider decisions.
Partial vials change the math
Filler, biostimulators, peptides, and many injectable products are not always consumed in whole units. If a 1mL syringe is split across multiple uses or a vial is partially wasted, the cost needs to be allocated accurately.
This is where spreadsheets usually break down. Fractional usage needs to stay attached to lot number, expiration, remaining quantity, unit cost, and the visit that consumed it.
Discounts and provider behavior matter
A treatment with the same product usage can have very different margin when a provider discounts the service or uses more product to achieve the same outcome. COGS alone is not enough. It needs to be compared against actual revenue by visit and provider.
That is why medspa profit tracking should connect product usage, service revenue, provider activity, discounting, waste, and shrinkage in the same operating view.
Use this COGS workflow
Record product usage at the visit level, not at month-end.
Use the actual unit cost from the specific lot consumed.
Separate product COGS from labor, rent, and overhead.
Review margin by treatment and provider, not only by total revenue.
FAQ
What is a good gross margin for a medspa treatment?
It depends on service mix, pricing, and product cost. The important first step is measuring margin consistently by treatment. Once you can see actual COGS per visit, you can compare Botox, filler, biostimulators, GLP-1, IV therapy, and retail services on the same basis.
Should labor be included in medspa COGS?
For treatment-level product margin, keep COGS focused on direct product cost. Labor, rent, and overhead can be layered into a broader profitability model, but product COGS should remain clean so owners can see whether the service itself is priced correctly.