Cost of sale (COS) is a metric that tells how much it costs for a business to produce products or services.
Why is COS important?
It helps to find out how profitable each transaction has been for a business and also helps to identify pressure points if profits start going down.
Calculation:
COS = (cost / revenue) x 100%
Example:
PRC Direct spent £1,000 on their ads last week, driving £24,000 in revenue. This means that last week's cost of sale was 4.2% ({£1,000/£24,000)x100%=4.2%)
