Cost of Goods Sold

Cost of Goods Sold (COGS) are the specific expenses required to provide your service to your customers. They are also called Cost of Revenue or Cost of Sales. Think of this as what you have to spend if all you needed to do was keep your existing customers up and running. 


This is why the Lean-Case CoGS Widget is part of the Lean-Case Revenue Models but is based on the general Lean-Case Expense Widget

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Examples for CoGS include (also see screen below) 

  • Production Cost, e.g. as an amount per unit sold
  • Hosting Cost, e,g, as a percentage of revenue 
  • Customer Support Cost. e.g. as a monthly retainer
  • Customer On-Boarding cost, e.g. per new customer 
  • Customer Care Cost, e.g. as a fee per existing customer
  • License Fees for bundled third party services or software that you offer, e.g. as a fee per units sold
  • Payment fees, e.g. as  a % of revenue (many companies also classify Payment cost as a G&A or S&M operating expense. Like always, the key is consistency in your model.)

If you haven’t calculated your CoGS and gross margin, you should just start to use a reasonable proxy value in your calculations (e.g. for SaaS the gross margin is around 70-80%).

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