COGS is outdated
Community signal
Supplier prices change in batches, but the cost in your tool is still the old one, so margin looks better than it is.
In real life: You paid more for the May batch, but the system still uses the February cost, so profit is overstated on every sale of new stock.
Shopify / DTCExcel / Manual
Data you need
- requiredInbound cost per batch. Each purchase order with quantity and cost.
- optionalUnits sold over time. To allocate sales to the right cost.
Formula
Weighted average cost
Σ(inbound_cost) / Σ(inbound_qty)A defensible single cost when you cannot run strict FIFO.
Key insight
- Using last-inbound price overstates profit on older, cheaper stock.
- Margin drift is silent until you reconcile costs.
Action checklist
- 1Recompute weighted cost monthly · medium · 30 min/mo
Refresh the cost used for profit. - 2Flag SKUs where cost rose over 10% · easy · 15 min
They need a price review. - 3Reprice the SKUs whose margin slipped · medium · 1 day
Restore target contribution margin.
Money impact · Protect margin
Keeps reported margin honest as supplier prices move, so pricing decisions use real cost.
Common mistakes
- One static cost field for all batches.
- Updating cost only once a year.
How Okiela helps
Cost overrides per SKUlive
Okiela lets you update SKU costs and recalculates profit on the spot.
Trust & sources
- Community signalBatch-cost tracking is a known small-seller gap
Last reviewed 2026-06-22 · Confidence 3/5