Cost to Serve

In generally accepted accounting practices, cost to serve is a methodology for calculating the profitability of a route to market, partnership relationship, or specific customer/account. Cost to serve includes variables such as total cost of sales and business activities, cost incurred in providing support and maintenance, and any contra revenue provided to partners. Another way of looking at cost to serve is that it’s the equivalent of the total cost of a supply chain between the product source and the end customer.

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