Venue commision on sales: Cost of goods sold or expense?

Hi All,
    I'm curious how to account for fees paid to Amazon for book sales. Two payments are made. On is $40 per month be a "Power Seller." This saves you
a $1 per sale fee, and allows you to electronically upload inventory lists. It's really a necessity, in my mind, to have this in order to conduct business there. When books sell, there is also a commission of roughly 15% of the sale price that Amazon retains.
    Would these two charges be considered costs of goods sold or simple expenses?
    It's possible - even likely - that I don't grasp the cost of goods sold concept quite right yet. I think of shipping expenses as costs of goods sold, as they are a necessary part of the sale of each item. By that line of thinking, almost all of my expenses are COGS though, and I know that isn't right. Where does one draw the line?
Thanks and Regards, Max
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On 15 Sep 2008 21:23:25 GMT, Max Moor wrote:

These are operating expenses. They help you sell your inventory, but they are not considered part of your inventory. They can be considered membership dues. You should also record the commission as an expense.

Shipping expenses are part of inventory when you buy it. When you sell the inventory, it is an operating expense, assuming you pick up the cost of shipping your inventory to buyers.

COGS = Beginning Inventory + Cost of Books You Buy - Ending Inventory
COGS is not used to directly debit or credit business expenses. COGS is totally dependent on the removal (or return) of inventory due to sales. It is not changed unless inventory changes. Inventory includes the cost of your books and any freight you pay for them. As such, when you sell a book, you would make a debit entry to record the a/r or cash and a credit entry for the sales revenue. At the same time, you would decrease the inventory account by the book's cost and increase the COGS by the same amount.
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Hi Rocinante,
    Thank you so much for the good answers. Cost of goods sold makes much more sense to me now. I mentioned that I had considered shipping part of that. As you mentioned, only the shipping (freight) paid to get the resellable goods in my hands is part of the COGS, not the shipping paid to get the product to my customer who purchased it. Just pointing that out to me made the light go on a bit brighter. It seems obvious, but I was mixing the two together in my head. Maybe my brain is full?
Regards, Max
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