Finance
COGS
Also known as Cost of goods sold
COGS, or cost of goods sold, is the direct cost of producing or acquiring the goods a business sold in a period. For physical products COGS includes the product cost, freight, duties and inbound fulfilment — collectively the landed cost — rather than the supplier invoice alone.
In plain terms: What the things you sold actually cost you to get.
Why it matters
The most common reason an e-commerce founder's books show profit the bank account does not. Recording only the supplier invoice makes every margin optimistic, sometimes enough to make a losing product look like a winner.
Read the full guideBookkeeping