COGS

For a brand that manufactures under contract, cost of goods sold is built from four things: the ingredients at current supplier prices, the packaging, the tolling fee at whatever volume band the run qualified for, and inbound freight apportioned across the batch.

The mistake almost every brand makes is treating it as a number typed into a spreadsheet once. It is a derived figure, and every input under it moves — sugar prices move, your co-packer raises rates, a run yields worse than planned and the same cost gets spread over fewer good units. A cost per unit that was accurate in March is fiction by September unless something is recalculating it.

Two versions are worth keeping separate. Ex-works cost is what it costs the moment it comes off the line. Landed cost adds outbound freight and third-party logistics to get it to where it sells. Margin quoted against the wrong one is the most common way a profitable-looking SKU turns out not to be.