COGS · Cost of Goods Sold
Cost of Goods Sold (COGS) is what it costs you to produce or buy the units you actually sold in a period, before marketplace fees and advertising.
For a physical-product seller, COGS typically covers the factory price, packaging, inspection, and freight to get stock into sellable position. It excludes selling costs like referral fees, fulfilment fees, and PPC, which come out later in the profit calculation.
Keeping COGS separate from selling costs matters because the two respond to different decisions: COGS improves through sourcing and negotiation, selling costs improve through listing, pricing, and advertising work.
Why it matters
COGS is the floor under every pricing and margin decision; if it's wrong, every profit number built on top of it is wrong too.
Related terms
See COGS on real products
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