Product Costs

Overview

Sellercloud allows you to control the cost determination of your product in order to avoid selling products at too low a price. You can adjust costs manually or enable specific options to update them dynamically.

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Manage Product Costs

To review or update a product’s costs:

1. Go to the Product Details Page.
2. Click Toolbox and select Purchasing.
3. The Cost panel displays the currently determined Last Cost, Average Cost, Gross Cost, Cost Per Case, and Salesman Cost of the product. Note that the Site Cost is not listed here – check the Product Details page’s Purchasing panel to see it.
4. Click Edit to update the costs:
   1. Last Cost: The most recent amount you paid to buy the product. You can’t change it here, it only changes when you receive Purchase Orders.
   2. Average Cost: The average amount you paid to buy the product, taking into consideration all received Purchase Orders. For more information, see Product Average Cost.
      1. Click the View Details icon in the Average Cost field.
      2. On the Average Cost Details page, click the Plus icon.
      3. Click the Amount line, and enter the adjustment amount. This can be a positive or negative value.
      4. The Per Unit Adjustment box works as follows:
         • When it is unchecked, the adjustment amount will be distributed across the inventory currently in stock. For example, if you have 100 in stock with an Average Cost of $100 and you add an adjustment of $10, the Average Cost will become $100.10, since 10/100 = 0.1.
         • When it’s checked, if you add an adjustment of $10 and your previous Average Cost was $100, the new Average Cost will be $110, regardless of how many units you currently have in stock.
      5. Specify the Reason for the changes.
      6. Click Add.
   3. Gross Cost: The Average Cost, excluding quantity from its calculation.
      • Calculation: Average of the Adjusted Price + Extra Cost (Per Unit) + Extra Cost (PO-Based Per Unit) for the product from all previous Purchase Orders.
   4. Cost Per Case: The total item cost of all product units in a single FBA Inbound Shipment Case or a Purchase Order Case.
   5. Salesman Cost: The percentage of a product’s purchasing cost added to account for external costs, such as warehousing and repackaging fees, used instead of the original cost when calculating a salesperson’s commission. You can learn more in the Salesman Cost section below.
5. You can also update a product’s Site Cost: The product’s price, either on the last PO at the time it is received (including the vendor price, discounts, and other costs) or based on the Average Cost, depending on your Client Settings, as described in the Other Cost-Related Client Settings section below. You can learn more about the Site Cost in the Order Item Cost Calculation article.
   1. Go to the Product Details Page.
   2. Click Edit, then in the Purchasing panel, update the Site Cost, and click Save.

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Salesman Cost

Some businesses add a percentage to items’ purchasing costs to account for external costs such as warehousing and repackaging fees. This added cost is called Salesman Cost and is used instead of the original cost when calculating a salesperson’s commission.  It can be manually set for each product, allowing sales staff to price products based on this cost instead of the average or original cost.

For example:

• Let’s say the commission rate is 5%, and Salesman Cost is 4% over the Site Cost.
• If an order’s total is $200 and the item’s Site Cost is $100, that should equal a profit of $100. 
• However, the salesman cost adds 4% to the item cost, which brings the cost up to $104. 
• Therefore, the profit is adjusted to $96, and the salesman’s commission is $4.

If you enable the Salesman Cost field:

• It will display on each product’s Purchasing page and will be updated automatically based on a percentage of the product’s Site Cost. 
• It will be used as the product cost when you generate the Salesman Commission Report.

The Salesman Cost can be manually set for each product, allowing sales staff to price products based on this cost instead of the average or original cost. For this, you must disable the client setting Enable Salesman Cost __% and enable Allow Free Edit Salesman Cost. However, this setup disables the Salesman Commissions reporting functionality.

Enable and Set Salesman Cost

Follow these steps to enable and set the default Salesman Cost percentage:

1. Go to Client Settings.
2. Click the Advanced button to enable advanced settings.
3. Select Purchasing.
4. Search for “Salesman”.
5. Check the Enable Salesman Cost box and set the Salesman Cost %.
6. Click Save.

If you set the Salesman Cost lower than the Site Cost, Average Cost, or Last Cost, you will be warned when you save.

Set Employee Restrictions

To allow employees to see and edit the Salesman Cost, add the Salesman Cost View and Salesman Cost Edit employee roles to their profile.

To prevent regular employees (that don’t have Administrator, Client Admin, or Pricing Admin employee roles) from seeing any costs other than the Salesman cost:

1. Go to Client Settings.
2. Select UI on the left.
3. Check the Hide Costs From Employees box.
4. Click Save.

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Other Cost-Related Client Settings

With Sellercloud, you can configure your Client Settings to control how product cost fields work. To access these cost-related configuration options, go to Settings > Client Settings > General Client Settings. Once there, you can update the following:

CLIENT SETTING	DEFINITION
Update Product SiteCost Based On PO LastCost	Automatically updates the Site Cost based on the cost of the item as it was received in the last Purchase Order.
Enable Update Cost when adjusting Inventory	Automatically updates the product’s Average Cost once the inventory is adjusted.
Update SiteCost when updating AverageCost	Automatically updates Site Cost based on the item’s Average Cost. However, note that the Site Cost won’t be set to 0 if the Average Cost is updated to 0.
Protect Site Cost	Prevents any user without a Client Admin role from editing the Site Cost.
Add Flag to Inventory Arrivals Page	Sets a flag on the Inventory Arrivals page, once the product Average Cost is changed. Hovering over the flag will show the original and new values. This reminds you to adjust the Site Cost accordingly.
Enable ALL Kits Cost calculation Once a day	With this setting enabled, the Site Cost, Last Cost, and Average Cost of All Components and Main Component kit parents will be updated once daily based on the costs of their kit components.
Enable Kit Cost Calculation For Independent Kits Too	With this setting enabled, the Site Cost, Last Cost, and Average Cost of Independent kit parents will be updated once daily based on the costs of their kit components.

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