Accounting
What Is SG&A (Selling, General, and Administrative)?
SG&A is the operating-expense block between gross margin and EBIT. It covers sales payroll, marketing, G&A payroll, software, professional services, occupancy, and insurance. For public DTC brands, the median runs 32 to 48% of revenue. If your SG&A grows slower than revenue, that is operating leverage. If it outpaces revenue, something is wrong.
SG&A (Selling, General & Administrative) is the operating-expense bucket between gross margin and operating income (EBIT). It's everything you spend running the business that's not COGS (Cost of Goods Sold), R&D, or depreciation.
What's in SG&A
- Selling: marketing spend (ads + agency + creative), sales payroll, sales tools, customer service payroll
- General: G&A payroll (finance, legal, HR), professional services, insurance, IT software, office costs
- Administrative: management compensation, board fees, legal/audit, occupancy (rent, utilities)
Example: typical DTC SG&A breakdown
A $30M DTC brand: 38% SG&A = $11.4M total. Marketing $5.2M, sales payroll $1.4M, G&A payroll $2.1M, software $0.8M, professional services $0.6M, occupancy + insurance $1.3M. Marketing + payroll alone is 75% of SG&A.
What's a typical SG&A?
- Public DTC median: 3248% of revenue
- Public DTC top quartile (efficient operators): 2232%
- Public DTC bottom quartile (growth-stage burn): 50%+
- Private DTC target at scale: 2838%
For benchmark context see SG&A as % of revenue, public DTC.
The most common mistake
Treating SG&A as a single block instead of breaking it apart by line. Operating-leverage opportunities live at the line level, software sprawl, redundant agencies, headcount creep. Roll it up only for the board pack.
Frequently Asked Questions
sG&A vs OpEx?
SG&A is the biggest piece of OpEx. OpEx also includes R&D, D&A, and one-time items.
is marketing in SG&A?
Yes, usually the largest line.
what does it mean if SG&A grows faster than revenue?
Negative operating leverage. Healthy brands grow SG&A slower than revenue at scale.
Related Terms
- What is CapEx vs OpEx?
- What is operating margin?
- What is EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin?
- SG&A % of revenue public DTC
Browse the full ecommerce finance glossary for every metric and money term a DTC operator needs.
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