Cost of Goods Sold (COGS) is the direct cost of making or buying the items a business sells in a set period. It helps you see how much money you really keep after paying for the product itself, in plain terms.
When to use it and why it matters
You use it when you’re working on income statements, pricing, and gross profit. It’s useful because it separates “product costs” from other business expenses, so you can spot if materials or production costs are rising.
Formula: COGS = Beginning Inventory + Purchases − Ending Inventory
A lower COGS (with the same sales) usually means better margins, but it can also mean you’re cutting quality or under-stocking, so always compare it with your sales volume and customer demand.
How Transportify relates
If your business moves goods between suppliers, stores, and customers, your delivery choices can affect what you spend to get products ready for sale. Transportify helps by providing on-demand delivery options and clear pricing, so you can plan pickups and drop-offs more predictably and keep your operations running smoothly.
Related Terms
First In First Out
Bill of Materials
 | Noel Abelardo Deputy Country Director |
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