In Zentail you can track the cost of your SKU's.  This is used for analytics, as well as calculating the cost of your warehouse inventory.

Currently, the way that Zentail tracks cost is by pulling it from the SKU at the time that the order is placed.  Let's run through a couple examples:

Best Practice

In this image we have a section with the original cost, a section with Cost A, and a section with Cost B.  The costs are updated as the inventory is restocked.  Let's say that:

  • Original Cost = $4.50, sold 20 units during this time
  • Cost A = $5.00, sold 20 units during this time
  • Cost B = $5.50, sold 20 units during this time

Then

  • Revenue = (20 * $10) + (20 * $10) + (20 * $10) = $600
  • Cost = (20 * $4.50) + (20 * $5.00) + (20 * $5.50) = $300

This method averages out the cost over time, and is the same as having a cost of $5.  It depends on whether you want to average it out by changing the cost as you restock, or enter an expected average cost and not change it.

Important Notes

  • If the cost is never changed after the restock, then the cost would be 60 * $4.50 = $270.  This is a good reason to either use an averaged cost, or update the cost as the inventory is restocked.
  • Zentail does not currently support FIFO or LIFO.  The current methods available either use an average cost or will result in an averaged cost over time with proper tracking.

Related Reading

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