COGS represents the total direct cost of producing or sourcing the products you sell. It is one of the most important metrics for calculating profit and pricing strategy.
Cost of Goods Sold (COGS) refers to the direct expenses involved in producing or purchasing a product. For Amazon sellers, this usually includes what you pay your supplier, manufacturing costs, and packaging. It does not include marketing or operational expenses.
COGS is the foundation of your profitability. If you don’t calculate it correctly, you may think your product is profitable when it’s not. It directly affects your pricing decisions, margins, and long-term sustainability.
