How to treat cost of merchandise that is printed on demand

[taxesarefunhun]

My husband has an online retail business that is print on demand so he never has custody of the inventory, just pays the cost of the item when a purchase is made. I originally used to show it as purchases (line 36) as COGS but seems like this may be more like supplies? Just seems weird to put a big number on the supplies line when that is supposed to represent incidental small purchases. Would love some advice on the best place to show the cost of materials. 

[ColeenD3]

You don't keep an inventory. You would use the supplies category.