COGS, or Cost of Goods Sold, plays a crucial role in pricing strategy. It represents the direct costs associated with producing the goods sold by a company. This includes the cost of the materials used in creating the good along with the direct labor costs used to produce the good. It excludes indirect expenses such as distribution costs and sales force costs. By understanding the COGS, businesses can set a price that covers the costs, ensures profitability, and is competitive in the market.
Need to evaluate the best pricing strategy for a product? This Pricing Strategy spreadsheet includes...
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