Glossary/Marketing Finance/Cost of Goods Sold (COGS)
Marketing Finance
Cost of Goods Sold (COGS)
The direct costs of producing or buying the goods a company sells, such as materials, manufacturing, and inbound freight.
By Brandon Mina·CEO, BrandPilot AI·Updated November 2026
Short answer
Cost of goods sold (COGS) is the direct cost of producing or purchasing the goods a company sells, including materials, manufacturing labor, and inbound freight. It excludes indirect expenses like marketing and administration. Subtracting COGS from revenue gives gross profit, which determines how much margin is available to fund marketing and growth.