What is the ideal cost of goods sold percentage range for soft goods according to retail practices?

The ideal cost of goods sold (COGS) percentage for soft goods in retail typically falls within the 50-60% range. This range is considered optimal because it reflects a balance between maintaining profitability and managing inventory costs effectively.

When managing soft goods, which can include clothing, bedding, and other textiles, retailers need to consider the competitive nature of the market and the perceived value by customers. A COGS percentage in this range allows businesses to cover their operating expenses, such as rent, payroll, and marketing, while still providing a margin that can contribute to overall profitability.

This percentage is critical for soft goods specifically because their pricing is often more sensitive to changes in market demand and competition compared to hard goods. By adhering to a COGS percentage of 50-60%, retailers can better navigate pricing strategies and maintain a healthy gross margin, which is necessary for long-term sustainability in the retail industry.