FIFO method

Inventory values are calculated following the FIFO method (first in, first out).

For more information, see Erply guide on the FIFO method.

Costs and values on a product card

Each stock item present 3 fields on the inventory card, related to their value.

The first two fields are calculated fields:

• Wholesale price: calculated from the price/cost set on purchase invoices and inventory registrations that brought the current stock into inventory.

• Warehouse price:  also called Landed price. Same as Wholesale price but including extra costs set in the dedicated field on purchase invoices. Additional costs can be divided between products either by amount or wholesale price / cost on the purchase invoice.

The last field is for indication only:

• Product cost: the expected cost for the product, ie. how much it is typically expected to be billed by a supplier for ordering this product.
  The product cost field does not affect calculation and is only autopopulating the price on a Purchase document when the product is ordered for the first time.

Price Calculator

A calculating tool is available on Inventory cards to simulate changing the items price or discounting the item and see the impact on the markup and margin, without actually changing the default Net Sales Price set on the product card.

Note: because the Markup and Margin are calculated based on the Warehouse price, the calculator is not usable when a products have never been received in inventory and/or has a Warehouse value of $0.

Price calculator fields description:

Discount: to simulate a percentage discount given, based on the net sales price

Final price: the Net sales price set on the product card, after discount adjustment

Markup: Final price to the Warehouse price, in increase percentage

Margin: profit in percentage of final sales price

On Costs of Goods Sold (COGS) reports

Information on markups and margins is also available in reports on sales already recorded in Erply. The following fields are available on COGS reports:

Purchase value: = Wholesale price

Warehouse value: = Warehouse price

Sales profit: in currency, Final price - Warehouse price 
 

Profit (% of revenue): = Margin, or