I sell tools but I don’t keep them in inventory if a tool sells on my website I email the manufacture and they ship the tool for me.  So for example I sell the tool for 300 and I pay 260 for it.  I have been putting down 260 as cost of good sold.  But I am not sure if I am doing it correctly since I never physically see the tool.  How do I need to label this in my expense report?