What percentage of revenue should your COGS be?
Asked 4 years ago
I'm trying to figure out if my COGS should be lower because it seems high. At the moment, it's sitting at 20% of my revenue. This seems a bit much, but I really don't know if this is normal or not? Is it possible to decrease this amount?
Donnell Cash
Monday, March 21, 2022
Cost Of Good Sold (COGS) is a subjective value. It changes for every business and location. Take the restaurant industry, for instance. 31% COGS from the revenue is considered a good value for a small diner. A high-end restaurant, where the cost can be higher due to expensive food and service, should aim at 20% COGS. 20% revenue is still an excellent number for most businesses out there. It can be lower than having a luxury brand where people pay for the tag.
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