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Cost of goods

Margin is only as good as the cost behind it. Here is where Reconcible gets each unit’s cost, and what it does when it doesn’t have one.

Docs Cost of goods
  1. Getting started
  2. Connecting your store
  3. Cost of goods
  4. How reconciliation works
  5. What the labels mean

Where costs come from

Estimates from your store, on day one

If your store records product costs in WooCommerce’s own cost field, or with the Cost of Goods for WooCommerce plugin by WPFactory, they’re imported when your store is set up and again every night, so margins exist before you’ve entered a single purchase. They’re marked estimated everywhere they’re used, because a cost typed into a product once is a guess about every batch since.

WooCommerce’s own cost field is an optional feature, switched on under Settings > Advanced > Features. If a product has a cost in both, WooCommerce’s is used. Each variation is read on its own, and one with no cost of its own takes its parent product’s. A cost of zero counts as no cost.

A cost you change in WooCommerce is picked up by the nightly import, so it can take up to a day to show in Reconcible.

Purchases, with landed cost

Real costs come from purchases you enter under Purchases. Each purchase records:

  • the supplier, and the currency they invoice in;
  • a reference or PO number, the purchase date, and the date it was received (leave it blank if it hasn’t arrived);
  • the exchange rate to your store’s currency, from the supplier’s invoice, if it isn’t invoiced in your currency;
  • freight, duty and handling on the shipment (enter 0 for any it didn’t have, never leave one blank);
  • each product, its quantity and unit cost, and its weight if you split costs by weight.

Freight, duty and handling are spread across the shipment’s units by unit count (the default), by weight, or by each line’s value. The result is the landed cost per unit, and that is what margin is worked out from.

Freight, duty and handling belong on the purchase, not under Fixed costs. Fixed costs are overheads like rent and software, spread across each day; they don’t change a product’s margin.

How a sale is costed

Each purchase becomes a cost lot. When a unit sells, Reconcible takes its cost in this order:

  1. The oldest purchase lot with units left. First in, first out. A real purchase always comes before an imported estimate.
  2. The estimate imported from your store, if no purchase covers the unit. The line is marked cost estimated.
  3. The most recent lot’s cost, if you’ve sold more units than your purchases hold. Also marked estimated.
  4. The cost field on the product in your store, read directly, if there’s no lot of any kind for it yet. Also marked estimated.
  5. Nothing. If there’s no cost at all, the cost is unknown and the margin reads unavailable. Reconcible won’t show a margin with no cost behind it, because a missing cost would otherwise count as free and show a 100% margin.

Every store uses first in, first out. Weighted average cost isn’t available yet.

Entering a purchase after the sales

If you enter a purchase dated before sales that were already costed without it, those sales should have used it. Reconcible marks the affected dates out of date and tells you how many when you save the purchase, and recalculates them automatically; What the labels mean explains what the banner says while it does.

Shipping

What you pay to ship an order isn’t tracked yet. It counts as $0.00 and is labelled not tracked. It is never taken from the shipping amount the customer paid.