Cost of Goods Sold (COGS) Revenue is the term used to describe a company’s revenue that comes from the direct costs associated with creating and selling its products or services. This can include raw materials, labour, and other expenses directly related to manufacturing or providing a service. In essence, COGS revenue is money earned by the sale of products and services minus any direct operating costs associated with their production. To use an analogy, if you were baking a cake, the COGS Revenue would be the price of the cake you sell minus the cost of eggs, flour, sugar and butter you used to make it. Knowing your COGS Revenue allows business owners to measure the financial health of their company, as well as identify areas where costs can be cut.