Working 80 hours a week just to keep the lights on? That’s not a business. It’s burnout with a truck payment.
Profit starts with knowing your true cost of goods sold (COGS). Not a ballpark guess. Not "what feels right." Real numbers that drive real profit. That’s how you go from chaos to control—and from control to 20%+ margins.
Here’s your no-fluff, field-tested guide to calculating COGS the right way.
▶️ Profit starts with COGS. Watch how top owners control costs.
How to calculate your moving company’s cost of goods sold
COGS = direct costs
The cost to deliver the job—costs that only show up when the truck does.
- Labor
- Sales commissions
- Materials
- Claims
- Services
- Trip fees
- Truck fees
- Fuel fees
- Travel time fees
- Prepaid storage
- Warehouse handling
- Discounts
- Credit card processing fees
What’s not COGS?
Indirect costs like admin wages, marketing, software, rent, and insurance do not belong in COGS.
These are:
- Operating expenses (aka overhead)
- Separate from COGS on your P&L
- Tracked after gross profit, not in it
Higher COGS, lower profit
Here's the math:
Gross profit = revenue - COGS
🎯 Target: Gross profit per job should be 40% or more. Not hitting that? Your COGS are too high—and your margins are bleeding.
The big 3 profit leaks and how to fix them
1. Crew labor: Keep it <30%
Top movers pay well—but they track labor per job, not just payroll.
What works:
- Pay competitive rates (avg: $22/hour)
- Use dispatch tools to right-size crew per job
- Bonus for efficiency (38% of top movers do)
- Eliminate timesheet errors with software
📈 Benchmark: 71% of top movers track profit per job, not just revenue.
2. Admin costs: Keep it <10%
Your back office shouldn’t cost more than your best crew.
What works:
- Switch to all-in-one software (79% of top performers have)
- Use AI for admin tasks (42% industry adoption rate)
- Ditch double entry—automate billing, scheduling, and follow-ups
⌛ Time saved: 10+ hours/week on paperwork alone.
3. Truck expenses: Keep it <10%
Every mile matters.
What works:
- Optimize routes to reduce miles and time
- Track fuel costs by truck and by job
- Maintain a 5:1 ratio of active to spare trucks
- Use GPS to eliminate dead miles
🚚 Pro move: Own your trucks. Leasing? That’s just paying someone else’s mortgage.
Don’t forget: Claims are a margin killer
Top movers keep claims under 1% of revenue.
How?
- Take photos of pre-existing damage (cut claims by 40%)
- Train crews (retain 2+ years = better quality)
- Track claims weekly
- Sell valuation coverage (35%+ attachment rate)
Rethink your marketing spend
Top movers spend 7-10% of revenue on marketing—and make every dollar count.
- Aim for 4-5X ROI on marketing spend
- Track dollars booked by channel and campaign
- Double down on lead sources that book at 50%+
- Invest 40%+ of budget in organic growth (SEO, referrals, reputation)
Update your pricing strategy
Stop competing on price. Start pricing for profit.
2026 data:
- 63% of movers plan to raise prices
- Premium days = 50% higher rates
✅ Pro tip: Use smart systems to protect high-value time slots and enforce minimum margins.
How SmartMoving changes the game
SmartMoving helps you:
- Track real-time costs on every job
- Calculate margins before the truck rolls
- Save 40+ hours/week on admin
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⚠️ Before SmartMoving:
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📈 After SmartMoving:
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