Costs of Goods Sold (COGS), sometimes referred to as Cost of Sales, represents the direct expenses associated with producing a product that is sold. This includes materials and labor used to produce the item as well as overhead costs related directly to production. On the other hand, Operating Expenses are those expenses associated with running the business that are not related directly to production. This includes things like rent, advertising, marketing expenses, utilities, general administrative costs, and more.
In short, Costs of Goods Sold are the cost of products you plan to sell – whereas Operating Expenses are the cost of running your business!