What you'll learn
The difference between gross margin and true cost of sale, and why most businesses conflate them
Which costs actually belong in your COGS and which belong in operating expenses
A step-by-step framework for calculating your true cost of sale
How to use this number to make better pricing and product decisions
What your cost of sale reveals about the sustainability and scalability of your business model
Preview
Your cost of sale is one of the most important numbers in your business. And the vast majority of business owners are calculating it wrong. Most people confuse it with gross margin, a related but fundamentally different metric. Others include costs that don't belong in the calculation, or exclude costs that do, making their COGS artificially low and their gross margin artificially high.
The consequence? You make pricing decisions based on incomplete information. You think your margins are healthier than they actually are. You underprice products and services. You fail to see which revenue streams are actually profitable and which are quietly eating your profits. You can't scale effectively because you don't understand the true cost structure of what you're selling.
This white paper shows you exactly how to calculate your cost of sale, what to include and exclude, and how to use that number to make better business decisions.
Download the full white paper
Get the complete guide with all frameworks, examples, and actionable steps.
About the author
Valont
Business capability firm for Australian SMEs
Articles published under the Valont name are written and reviewed by the Valont team, the specialists who do this work for Australian SMEs every day across Finance, People, Operations and Growth. Where a piece has an individual author, it is credited to them by name.
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