Optimize your warehouse profitability with SKUSavvy’s advanced inventory cost tracking (COGS). Learn how to manage Weighted Average Costing within SKUSavvy.
To optimize your warehouse profitability, use SKUSavvy's advanced inventory cost tracking. The system provides a granular, real-time valuation of physical stock at the bin level. This ensures procurement prices, shipping fees, and duties accurately reflect in your Cost of Goods Sold (COGS).
Navigate to **Company Settings** > **Enable Cost Tracking** to turn on this company-wide feature. Every inbound shipment, transfer, adjustment, pack, and unpack will now participate in cost calculations.
Default Landed Cost: A per-SKU fallback unit cost used whenever no explicit cost is provided.
Bin Unit Cost: The live weighted average cost of the units physically sitting in a specific bin.
Order COGS: The unit cost captured at the moment you pack an item into an outbound shipment.
The platform uses a 'Moving Weighted Average' calculation to determine inventory value. When you introduce new inventory to a bin, the unit cost for all items in that specific bin recalculates.
Formula: ((Current Bin Qty * Current Bin Unit Cost) + (Incoming Qty * Incoming Unit Cost)) / (Total Bin Qty) = New Moving Average Unit CostNote: Because the average calculates at the bin level, moving items preserves the cost associated with those specific units. If you transfer stock from a 'High Cost' bin to a 'Low Cost' bin, the receiving bin will perform a new weighted average calculation upon arrival.
When you pick items from a bin, the per-unit cost stays constant. Only the bin's total cost shrinks proportionally.
To maintain accurate valuations when explicit costs are missing, the system uses a Default Landed Cost. Every product variant has this fallback field.
Manual Adjustments: Pre-fills when you add stock without a cost to keep WAC accurate.
Inbound Check-ins: Used as the receiving cost on PO lines missing a unit cost.
Reports: Valuates SKUs with no on-hand stock for replenishment forecasts.
If you never set a default, the system falls back to the most recent non-zero unit cost recorded for that SKU.
Note: Default Landed Cost is per-SKU, not per-bin. Setting it only affects future cost pre-fills and new inbound stock. To restate the cost of stock you already hold, you must perform an inventory adjustment.
Per item: Open the variant page and edit the field directly.
Bulk: Navigate to **Inventory** > **Import** > **Landed Costs** to upload up to 10,000 rows via CSV.
To get accurate WAC values from day one, you must run imports in the correct sequence. SKUSavvy provides three distinct import flows.
1. Run a Landed Cost Import to establish a per-SKU default for every variant.
2. Run a Quantity Import to seed your physical bin counts.
3. View Bin Locations for high-volume SKUs to verify the per-unit costs.
To capture true inventory cost, you must factor in Additional Costs during check-in. The system blends expenses like freight, duties, and insurance into the per-unit value of received items.
Each Additional Cost row carries its own strategy. You can mix and match strategies on the same shipment to allocate costs accurately.
By Quantity: Splits cost proportionally to the number of units on each line.
By Value: Splits cost proportionally to the line value.
By Weight: Splits cost proportionally to total line weight.
1. Stage 1: Allocates per line item by summing the split costs.
2. Stage 2: Blends the allocated cost into the receiving unit cost to produce the true landed unit cost.
Formula: ((Line Unit Price * Line Qty) + Allocated Additional Cost) / Line Qty = True Landed Unit CostTo ensure allocated costs sum back to the exact dollar amount, the system uses the largest remainder method. The unit holding the largest fractional remainder receives the extra cent.
CRITICAL: You must apply Additional Costs BEFORE finalizing the check-in. Once you place units into a bin, the moving average calculation commits.
When you move inventory via a Transfer Order, the 'Transfer Value' calculates from the source bin's current unit cost. If you place items into a destination bin already containing that SKU, a new weighted average generates.
To ensure accurate valuation between warehouses, you can attach Additional Costs to Transfer Orders. These blend at check-in on the destination side.
To track profitability accurately, outbound orders capture the specific COGS for the packed items. You can view this data on the order page and in exports.
Unit Cost: The specific per-unit COGS for the item at pack time.
Total Cost: The summed COGS for the line item.
Profit: Total Revenue minus Total Cost, Label Cost, and Insurance.
To establish a baseline valuation, you must choose a migration strategy for existing inventory when enabling Cost Tracking.
The system applies the most recent Purchase Order price to all current on-hand inventory.
Existing inventory remains at $0 cost. The system applies costs to bins the first time you restock or adjust them.
Run a Landed Cost CSV import to set defaults. Then, issue an adjustment for each bin to apply that cost to existing stock.