Hello,
COGS or Cost of goods sold, or "cost of sales" is just another way of classifying your accounts. You don't have to use it if you don't feel it fits your business.
Usually businesses use COGS to separate cost of materials from operational accounts, for example COGS for a bakery would include the material costs for the raw components that go into making the product along with the labor costs used to put everything together.
The cost of sending the product to the shop and the cost of the labor used to sell the product would be excluded.
There is a wiki article explaining this concept:
http://en.wikipedia.org/wiki/Cost_of_goods_soldThanks,