The distinction between Cost of Goods Sold (COGS) and Supplies in the business world can be important to understand. COGS, also known as cost of sales, is the total cost of producing a product that is then sold. This includes direct costs such as materials and labor, as well as indirect costs like shipping and marketing expenses. On the other hand, supplies are typically items that are used for general operations, but not necessarily for creating a product. These are things like office supplies and janitorial materials that support “overhead” operations or specific departments within a business. In short: COGS helps measure how efficiently a business manufactures products whereas supplies help measure how efficiently it runs its operations.