Warehouse COGS: Tips & Tricks

Follow

This article explains how Vagabond handles Cost of Goods Sold (COGS) in the Warehouse, and the recommended method for setting accurate product costs using a blended Cost per Case.

Things to know

• The Vagabond system was designed as a simple product inventory management tool, focused on monitoring sales at vending machines rather than tracking products through the sales process.
• The system cannot accommodate two or more products with the same name, regardless of other differentiating factors (such as Cost per Case or Source). Identical products at different price points or from different vendors need to be listed as "separate" products, or a blended Cost per Case should be used.
• The system does not differentiate between "first in, first out" (FIFO) products. Listing "separate" products but not changing the coil assignments will skew the data being collected. Vagabond recommends the blended Cost per Case at this time to avoid confusion.
• Changing the costs associated with a product in the Warehouse affects all reports generated from Vagabond. COGS reporting from Vagabond should not be used in lieu of accounting software or other product inventory tools until those features are released.

Blended Cost per Case for the Vagabond Web App

Preferred Method

Collect invoices for product purchases from a period of at least one fiscal quarter (preferably a fiscal year). Find the average cost per case for each product based on the invoices and case size (some cases are 24 units, some are 36, etc.). Enter the average cost per case for each product in Vagabond.

Rely on the entered costs for one fiscal quarter, then re-average costs with the additional data to determine whether any changes should be made to the costs saved in the web app.

Worked example

For instance, using a 36-can case of 12 oz Coca-Cola Classic purchased weekly through various suppliers:

In the above example, the average cost for a 36-can case of 12 oz Coca-Cola Classic entered into Vagabond should be $11.08. The Vagabond app will assign $0.31 as the cost of one 12 oz can of Coca-Cola Classic (11.08 ÷ 36). The reports that calculate COGS will do so at that rate.

For instance, if 523 cans were sold last week at $1.00 each with the above example COGS, the report would show:

Follow the same steps, adding the next fiscal quarter, to double-check the average.