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Selling expenses

Selling expenses are the costs associated with distributing, marketing and selling a product or service. They are one of three kinds of expense that make up a company’s operating expenses. The others are administration and general expenses.

Selling expenses can include:

  • Distribution costs such as logistics, shipping and insurance costs
  • Marketing costs such as advertising, website maintenance and spending on social media
  • Selling costs such as wages, commissions and out-of-pocket expenses

Selling expenses are categorized as indirect expenses on a company’s income statement because they do not contribute directly to the making of a product or delivery of a service. Some components can change as sales volumes increase or decrease, while others remain stable. Hence, selling expenses are considered to be semi-variable costs (as opposed to fixed or variable costs).

More about selling expenses

The excerpt below shows where selling expenses appear on a company’s income statement and how they are used to calculate total costs and earnings before interest and taxes.

Selling expenses