First published:

Last Edited:

Number of edits:

Costs of goods sold

It refers to how much it costs to produce the product a company sells. It includes materials and labor, but excludes sales and marketing, for example. (It also excludes distribution). It is very closely related to the bill of materials, adding the labor costs. It also takes into account external services required to produce the product.

Getting the COGS right is fundamental when determining the gross margins or net margins of a product, and it can make or break a company.


These are the other notes that link to this one.


Share your thoughts on this note
Aquiles Carattino
Aquiles Carattino
This note you are reading is part of my digital garden. Follow the links to learn more, and remember that these notes evolve over time. After all, this website is not a blog.
© 2021 Aquiles Carattino
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License
Privacy Policy