My Handmade Biz-Why Track Cost of Goods Sold?
Why do I need to track Cost of Goods Sold and WHAT exactly is it? Understanding what Cost of Goods Sold is and WHY it's important to track it is…
Cost of Goods Sold
Cost of Goods Sold (COGS), in a nutshell, is ALL of the costs associated with the items you make or the services you sell or provide.
If you’re a maker, then it includes the materials you use in your finished items and all of the costs associated with selling that item.
As a designer, then it’s all of the materials and other costs that goes into getting that pattern out the door and sold.
And, if you’re a tech editor, then it’s the supplies that you use when doing an actual tech edit project for a client.
Depending on what your handmade or creative biz is all about you could call it different things – but they all mean the same thing.
- Makers should stick with Cost of Goods Sold
- Designers might call it Cost of Designs or Cost of Samples
- Tech Editors might call it Cost of Sales