Cost of goods

cost_of_goods

Description: The price the shop paid for each item sold, plus freight and duty to bring it in. VAT is left out. Shipping to customers, fees and packaging are not part of it.
When to use: Use it to work out Gross profit. To see the share of sales left after it, use Gross margin. To see every cost of an order, use Expected contribution profit.
Formula: For each item sold, its unit cost times the number sold. Add these up, without VAT. Take off items that came back and went on sale again.

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