Cost of Goods Sold Calculator
Free COGS calculator. Beginning inventory + purchases − ending inventory. Essential for profit margin analysis.
Cost of Goods Sold Calculator
Formula: COGS = Beginning Inventory + Purchases − Ending Inventory
How Cost of Goods Sold Calculator Works
COGS = Beginning Inventory + Purchases During Period − Ending Inventory. For SaaS or service businesses, COGS is the direct cost of service delivery.
COGS to Gross Margin by Industry
| Label | Meaning |
|---|---|
| SaaS gross margin >75% | COGS below 25% of revenue — best-in-class |
| Ecommerce gross margin 30–50% | COGS at 50–70% of revenue — typical |
| Manufacturing gross margin 20–35% | COGS at 65–80% of revenue |
| Services gross margin 30–60% | Highly variable based on labour intensity |
Frequently Asked Questions
What is COGS?
Cost of Goods Sold (COGS) represents the direct costs attributable to producing the goods or services sold. For physical products: materials + manufacturing labour + shipping. For SaaS: hosting + support + implementation. It's subtracted from revenue to get gross profit.
What's excluded from COGS?
Operating expenses like sales, marketing, R&D, and general & administrative costs are not COGS. Only direct production costs count. This distinction matters for gross margin calculations and financial reporting.
How does COGS affect profitability?
COGS directly determines gross margin. High COGS = low gross margin = less money available for operating expenses and profit. Reducing COGS (through automation, better supplier terms, or infrastructure optimisation) directly improves gross margin.
Is my data stored?
No.
Can I use this on mobile?
Yes.
About This Tool
Built by the Calcyo team and last updated June 2026. All calculations follow industry-standard methodology. No data leaves your browser — calculations run entirely client-side using JavaScript. If you spot an error in the formula or benchmark data, email us at support@calcyo.xyz.