How is cost of sales calculated for a classifieds website?

I opporate a website that offers advertising for businesses. I am having problems calculating my cost of sales for a business plan to raise finance. It doesn’t cost us anything to make the adverts because the user does that online, we just host the advert at a price. Is my own website hosting and bandwith the only cost of sale?

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2 Responses to “How is cost of sales calculated for a classifieds website?”

  1. Rosemary P says:

    Your website hosting and bandwith are not cost of sales, they’re overheads as you can’t attribute them directly to sales. In other words, they’re your virtual premises costs.

    I’m not sure what expenses you’d have that could be included as cost of sales. The usual things are stock that you purchase, packaging for the finished product and staff costs of anyone employed on producing your products.

    It sounds as if most of your expenses will be in the overheads section of your business plan.

    Good luck!

  2. 'Just smile' says:

    Hosting & Band width will cost and IF you have an affiliate system in place that will cost to – simply because you are paying people to get you more people basically.

    Another thing- ( baring in mind that I dont know the cost of your ads nor did YOU advertise your site in your question )your cost should be LOWER than if you were to place it yourself.

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