What is COGS?
COGS stands for Cost of Goods Sold.
COGS is the direct cost of the products you sold in a period — usually the landed cost of each unit sold.
Example
Selling 500 units with a landed cost of $6 each is $3,000 of COGS.
Why it matters
Using the supplier price instead of the full landed cost understates COGS and overstates profit.
Calculate it: Landed Cost Calculator
True per-unit cost with freight and duty
Flashcard
What is COGS (Cost of Goods Sold)?
Tap to reveal the answerCOGS is the direct cost of the products you sold in a period — usually the landed cost of each unit sold.
Related terms
Landed cost
Landed cost is the total cost of getting a product to where you sell it: product cost + freight + insurance + duties + customs and other fees.
Gross margin
Gross margin is revenue minus the direct cost of the goods sold, as a percentage of revenue. It excludes overheads like software and salaries.
Read more in our guide: Profit Margin vs Markup: The Difference That Costs Sellers Money