Selling and distribution expenses
In one sentenceThe expenses needed to sell goods and deliver them to customers, such as sales reps' commissions, advertising, delivery costs and sales team salaries.
Simply put
Part of these expenses changes with sales, such as the rep's commission and the delivery cost, and part is fixed, such as the sales manager's salary. Separating them from administrative expenses shows you how much it costs you to reach the customer.
Compare their ratio to sales before and after advertising campaigns to see whether the campaign paid off.
Worked example
A food factory has sales of 2,000,000 SAR, and paid sales rep commissions of 45,000 SAR, delivery of 30,000 SAR and advertising of 25,000 SAR.
Sales rep commissions45,000
Delivery30,000
Advertising25,000
Total100,000
Ratio to sales = 100,000 ÷ 2,000,0005%
Don't confuse it with
Cost of goods soldThe cost of goods is the price of what you sold, while selling expenses are the cost of getting it to the customer.