The cost of goods sold (COGS) measures the costs that are directly tied to the production or sale of products (sales commissions, credit card fees, shipping, labor directly involved with production, inventory cost, etc). For a retailer, often this is simply the beginning inventory and purchases during the measured period, minus the ending inventory ( COGS = beginning inventory + purchases - ending inventory). For a brand, the inventory should include any raw materials and work-in-progress inventory, as well as manufacturing labor and costs.

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