Cost of Goods Sold (COGS) is the cost of the product or service you sell, minus any discounts or returns.
For example, if you sell a product for $100 and you give a 10% discount, your COGS is $90.
COGS is calculated by dividing the cost of your product or service by the number of units sold.
For example, if you sell 100 units of a product for $90 each, your COGS is $9 per unit.
COGS is a very important metric because it is a direct reflection of your company's gross profit. The higher your COGS, the lower your gross profit.
The lower your COGS, the higher your gross profit.
The higher your gross profit, the more money you have left over to spend on marketing, research and development, and other important aspects of your business.