Direct cost of sales is a shortcut for cost of goods sold: traditionally, the costs of materials and production of the goods a business sells, or the costs of fulfilling a service for a service business.

For more on costs of goods sold, see our article on the LivePlan blog: What Are Direct Costs?

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Bplans GlossaryBplans Glossary

At Bplans, it's our goal to make it easy for you to start and run your business. Our glossary of common business terms will help you learn about key small business and entrepreneurship topics, to help you plan, fund, and grow your business.