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💵 The Cost of Goods Sold (COGS) is the amount that you've paid for products that are no longer in your inventory because they've been sold or written off. In this article, we'll cover how the eTailPet system calculates COGS, and go over how inventory changes affect COGS, as well as how to resolve issues with COGS when they come up.

Overview of Terminology

Here a few definitions you'll need to know:

• Quantity On Hand (QOH) — This is inventory you already have in stock.

• Unit Cost — This is the price you pay to a Vendor for one unit for a product.

• Cost of Goods (COG) — This is the amount you've paid for your current inventory.

• Cost of Goods Sold (COGS) — This is the amount that you've paid for products that are no longer in your inventory, either because they've been sold or written off.

• Average Cost — This is the average dollar amount you've paid for a product throughout your store's history.

• Margin — Margin is the value you get from dividing Net Profit by Revenue.
  • Revenue = Selling price
  • Net Profit = Revenue - Unit Cost
  • Margin = Net Profit / Revenue

🐱 Please Note: In order to have an accurate values for COGS, Average Cost, and Margin, you will need to know the Unit Cost. If you want to learn how to update Unit Costs, click here to read our article on Batch Cost and Price Updates, or read Change or Remove Items.

How to View Costs and Average Costs

Here is how you can see product costs and their average costs:

1. Go to Reports.

2. Go to the Product Detail Report.

3. In the Product Detail Report, click on the Export button above the table.
   
   

4. You will receive an email with an Excel spreadsheet file that contains all details of your product catalog. 

What Changes Cost of Goods and Average Cost

Below is a table that lists out each event that can change the COG and Average cost of a product and potentially cause inaccuracies.

Fixing the Average Cost in Product Manager

If you need to fix the average cost of a mass amount of products, here is how to do so in the Product Manager:

Step 1: Use Product Manager

1. Go to Product Manager from the eTailPet main menu.
2. Click on Change or Remove Things on My Items.
3. You'll be directed to another page where you can add filters to pull a list of products.

Step 2: Find Items You Will Change

Find a your list of products by using the filters in this page. Here is how to search for items using this:

1. Search — Enter a keyword, UPC, or System ID.
2. Brands — Select a brand or multiple brands from the drop-list.
3. Categories — Select a category or multiple categories from the drop-list.
4. Item Type — Select an item type from the drop-list. Your options are:
   • Single — This is for items sold as individual items.
   • Fractional — This is for items that can be sold in varying or partial amounts, like bulk weight items.
5. Vendor — Select a Vendor of the items from the drop-list.
6. Custom Field 1 — If you've set a custom filter, you can select an option from the drop-list.
7. Custom Field 2 — If you've set a custom filter, you can select an option from the drop-list.
8. Store table to display and base changes on — Select the store for which you'll be changing items. Any actions you make towards items will only apply to the items of this store. This field is required to search for and select items.
9. Taxable — Select an option for items that are taxable or not. If you want to all taxable options, keep the selection at All.
10. Select — Click on the Select button in the upper right to pull results for items that match your filters.

You'll then be directed to a table showing products that match your filters, and you can apply the Change Average Cost bulk action to them.

Step 3: Select Products and Select Change Average Cost

😸 Please Note: Changing the Average Cost requires the system to remove all Quantity on Hand and add it back in at the selected cost. This process may take some time. If you sell an item while this process is happening, your Quantity on Hand count may be a little off. If you are doing this for more than 200 items, we recommend performing this bulk action after you've closed your store.

Once you access a table of products that match your filters, you can apply a bulk action to Change Average Cost.

1. In the table, click the checkboxes on the left-hand side for products you want to change. You can also click on the checkbox in the column header to select all products.
2. Above the table and on the right-hand side, go to the Select a bulk action field.
3. Select Change Average Cost from the drop-list.
4. Click on the Go button. This will open another window so you can enter details about changing the average cost.

Step 4: Apply the Change Average Cost Bulk Action

Each field and function of the Change Average Cost action window is explained below:

1. Set All Average Costs — Enter a dollar amount here to change the average costs of all items in the results list.

2. Set All Average Costs to Current Primary Vendor Cost — If the primary Vendor for the products has changed their costs, you can check this box to match the average costs of the items to the current cost from the Vendor.

3. Change on Stores — Select a store or multiple stores to which this change in average cost will apply.

4. Change Average Cost — Click on the Change average cost button in the bottom right to update the average costs of the items in your results list.

Fixing the Average Cost Manually

This is how you can manually change the average cost of a product:

1. Go to Manage Catalog > My Products.
2. Click on the Name of the product you want to edit.
   
3. Click on the History tab to view the product's history.
4. View the product's Average Cost in the table and check if it's correct. If not, continue with the following steps.
   
5. Click on the Vendor Details tab.
6. Confirm that the Default Cost is correct. If not, edit it and click Save in the bottom right of the table.
   
7. Click on the Inventory tab.
8. Scroll down to Remove Inventory. Select the Store for which you're removing the inventory.
9. Enter the Quantity you want to remove from inventory; make sure this is the same as the product's Quantity On Hand because you want to remove all units.
10. Click on the Remove Inventory button.
    
11. Go to the Add Inventory section above the Remove Inventory one. Select the Store from the drop-list.
12. Enter the Quantity you want to add back into inventory; make sure this is the same as the number you removed earlier.
13. Enter the correct Unit Cost of the product.
14. You can select the Vendor of the product, if needed.
15. Click on Add Inventory.

The product's unit cost should now be correct.

Fixing the Average Cost Through Import

Please Note: We strongly recommend exporting a copy of the Product Details Report before you use this method so you have a backup of your data in case you encounter issues with the import method.

If the average cost for a product isn't accurate because you imported a product file or updated your inventory without a unit cost, you can fix it using the import method again. Here's what to do:

1. Go to Reports from the main menu.
2. Scroll down to the Inventory section and click on Product Detail Report.
   
3. Click on the Export button in the Product Detail Report to download a copy.
   
4. Go to Manage Catalog > My Products from the main menu.
5. Click on Import Product Inventory to open more options.
6. Click on Export Sample File.
7. Enter the products you want to fix into the sample template. You can copy and paste the data from the exported file you downloaded in step 3.
8. Set all QOH (Quantity On Hand) in the sample file to 0. 
9. Set the Unit Cost in the sample file to be blank.
   
10. Go back to Manage Catalog > My Products.
11. Click on Import Product Inventory.
12. Click on Upload Excel File to upload the updated spreadsheet. This will reset your inventory QOH and Unit Cost.
13. Repeat steps 4-6.
14. Edit the sample file again to include the correct QOH and Unit Cost.
15. Repeat steps 10-12 with the updated spreadsheet that has the correct QOH and Unit Cost.
16. To check that the QOH and Unit Cost are now correct, repeat steps 1-3 and review the new spreadsheet.
    
    

Related Topics

Max Per Cart vs. Quantity On Hand

Reports Overview

Frequently Asked Questions

Q: Why does my COGS show as $0 for some products?

A: This happens whenever inventory gets added without a cost attached — during an inventory count, a manual addition, a PO check-in, or a QOH import — and no Vendor cost or manual cost was entered at the time.

Q: What's the difference between COG and COGS?

A: COG is what you've paid for your current inventory, the stuff still on your shelves. COGS is what you've paid for inventory that's no longer in stock, because it sold or got written off.

Q: If I fix the cost during Purchase Order approval, does that update my Vendor cost too?

A: No. Editing the cost during PO reconciliation only fixes that one order's COG. You'll hit the same $0 issue again on future orders unless you also update the Vendor cost.

Q: Should I use the Product Manager bulk action or the manual method to fix Average Cost?

A: Use the bulk action for a large batch of products at once (do it after hours if you're touching 200+ items). Use the manual method when you're only fixing one product.

Q: Why does the import-fix method require uploading the file twice?

A: The first import zeroes out the QOH and cost to clear out the inaccurate data. The second import then adds the correct QOH and Unit Cost back in cleanly.

Q: I have a question, but I can't find my answer here. How do I get more assistance?

A: You can ask any question at the number listed here. Contact our support team at (323) 370-0738 for the U.S. and (888) 370-2363 for Canada.