--- title: The Moving Company's Guide to Profitable COGS (with Target Metrics) description: Stop guessing at your moving company's true costs. Get industry-tested COGS formulas and profit benchmarks to go from break-even to 20%+ net margins. --- [Blog ](https://www.smartmoving.com/blog) # [The Moving Company's Guide to Profitable COGS (with Target Metrics)](https://www.smartmoving.com/blog/whats-the-ideal-cost-of-goods-sold) Written by [Briana Harper](https://www.smartmoving.com/blog/author/briana-harper) | Dec 23, 2025 8:42:11 PM 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](https://www.smartmoving.com/case-studies). Here’s your no-fluff, field-tested guide to calculating COGS the right way. ▶️ Profit starts with COGS. Watch how [top owners control costs](https://youtu.be/04ZC8jEBoa8?si=v_91JY3CEGhoWtr0).   ## 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](https://www.smartmoving.com/sales-commission-playbook) - 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](https://www.smartmoving.com/blog/ai-use-cases-for-moving-companies) (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](https://www.smartmoving.com/blog/why-movers-should-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](https://help.smartmoving.com/en/articles/3991632-marketing-roi-report) and [campaign](https://help.smartmoving.com/en/articles/8945516-tracking-utms-in-smartmoving) - Double down on lead sources that [book at 50%+](https://www.smartmoving.com/blog/what-is-a-good-booking-percentage) - 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 |  ⚠️ Before SmartMoving: - 7-10% margins - Manual cost tracking - Missed profit | 📈 After SmartMoving: - 20%+ margins - Real-time job costing - Predictable profit | | --- | --- | 👉 **[Schedule Your Live Tour Now](https://www.smartmoving.com/demo)** [View full post](https://www.smartmoving.com/blog/whats-the-ideal-cost-of-goods-sold) ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Briana Harper" }, "dateModified" : "2025-12-23T21:36:12.499Z", "datePublished" : "2025-12-23T20:42:11Z", "headline" : "The Moving Company's Guide to Profitable COGS (with Target Metrics)", "image" : { "@type" : "ImageObject", "height" : 628, "url" : "https://496071.fs1.hubspotusercontent-na1.net/hubfs/496071/Moving%20Company%20COGS.svg", "width" : 1200 }, "mainEntityOfPage" : "https://www.smartmoving.com/blog/whats-the-ideal-cost-of-goods-sold", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "height" : 60, "url" : "/hs/hsstatic/content_shared_assets/static-1.4092/img/default-amp-logo.png", "width" : 60 }, "name" : "SmartMoving Blog" } } ```