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COGs Analysis & Breakdown
As a business selling goods, it's crucial to have a deep understanding of your cost of goods sold (COGS) in order to maximize your profit margins. If you're wondering How to do a COGS analysis, you're not alone. Many businesses struggle with understanding and tracking COGS, but it is a vital aspect of running a business.
The COGS or cost of goods sold is the direct cost associated with producing and selling your products.
This includes all the expenses incurred in the production process, such as raw materials, labor, and shipping. Understanding these components helps you determine the minimum price you need to charge for your products in order to cover expenses and make a profit for your business.
Understand Your Costs and Make Informed Decisions
Turning a blind eye to where your money is going is a recipe for disaster. By analyzing expenditures, you can make informed business decisions and staying competitive in your market.
For example, without an accurate understanding your expenses, you may set prices that are too low, leaving you with little to no profit margins. On the other hand, you may also set prices that are too high, causing you to lose sales to competitors.
Having a clear understanding of all factors involved is essential for striking the right balance and ensuring the long-term success of your business.
What is a COGs Analysis?
COGS Analysis is the process of determining the cost incurred in producing a product or delivering a service, and includes direct materials, direct labor, and overhead costs.
At ARCHER ATR our process starts with obtaining relevant data, asking questions about your process, and asking partners with industry relevant experience to weigh in. This feedback or analysis, helps identify challenges and creates conversation that helps to address things like potential pricing strategy concerns, and improving your profit margins.
Your COGs Analysis is a Big Opportunity
Our analysis services can also help you identify common challenges related to your cost of goods sold, such as accurately tracking expenses, understanding how pricing and volume affects expenses, and identifying opportunities to reduce expenses.
We can provide you with the tools and guidance you need to make informed decisions, capitalize on opportunities, educate your team, and achieve long-term success.
Don't let yourCOGS be a roadblock to success. Contact us today to learn more about how we can help you achieve your business goals and maximize your profit margins.
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Go-to-market strategies