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Finance

COGS

Cost of Goods Sold

Also known as cost of goods sold, cost of sales

The direct cost of producing what you sell — materials, manufacturing, delivery. Not overheads like rent or salaries of non-production staff.

Example

If a shirt sells for ₹800 and costs ₹300 in fabric and stitching, that ₹300 is COGS.

Related terms

P&L
A summary of your income and expenses over a period that shows whether you made a profit or a loss. Also called the income statement.
Gross Margin
The share of each sale left over after the direct cost of making it — before overheads. Higher margins give you more room to grow.

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