Real-World Examples: Defining COGS with Multiple Elements and Date Ranges

💡 TL;DR
This article shows how to model realistic product cost scenarios in SellerLegend using real numbers — including changing supplier costs, fluctuating currencies, and shipment-specific pricing.

🧾 Example 1: Basic Cost Periods Over Time

Scenario:
You sell a Bluetooth speaker. Initially, the cost is $8.25 per unit. Later, the supplier increases prices to $9.10.

Start Date	End Date	Unit Cost	Notes
2024-01-01	2024-06-30	$8.25	Initial cost
2024-07-01		$9.10	Price increase (new batch)

Result:

Orders placed Jan–June 2024 use $8.25 per unit.
Orders from July onward use $9.10 per unit.

🧾 Example 2: Using Detailed View with Provider and Notes

Scenario:
You import yoga mats from two different suppliers. Each has a different cost structure and currency.

Start Date	End Date	Provider	Units	Total Paid	Currency	Exchange Rate	Notes
2024-01-01	2024-04-30	Supplier A	1,000	3,200	USD	1.00	Initial US batch
2024-05-01	2024-08-15	Supplier B	1,200	2,700	GBP	1.30	UK batch at discount
2024-08-16		Supplier A	1,500	5,100	USD	1.00	Return to US supply

Unit Cost Calculation (Detailed View):

First row: Jan 1, 2024 to April 30, 2024 $3.20 per unit ($3,200 for 1,000 units)
Second row: May 1, 2024 to August 15, 2024 £2.25 per unit → £2.25 × 1.30 = $2.93 USD
Third row: August 16, 2024 to eternity, $3.40 per unit ($5,100 for 1,500 units)

Result:
Each order uses the appropriate per-unit cost based on the order date, supplier, and currency.

🧾 Example 3: Handling Gaps and Overlaps

Scenario:
You forgot to define a cost for May. Here’s the current cost timeline:

Start Date	End Date	Unit Cost
2024-01-01	2024-04-30	$2.75
2024-06-01		$3.10

Problem:
May 2024 has no cost period — SL will use $0 COGS, thereby causing your profit to be inflated artificially.

Fix:
Add a bridging period:

Start Date	End Date	Unit Cost
2024-05-01	2024-05-31	$2.90

Now SL has complete coverage.

🧾 Example 4: Future Cost Planning

Scenario:
You know your manufacturer is increasing prices starting next month.

Start Date	End Date	Unit Cost	Notes
2024-01-01	2024-07-31	$6.50	Current batch
2024-08-01		$6.95	Future-dated new cost plan

Result:

SL will use $6.50 until the end of July.
From August 1st, orders will be costed at $6.95.

You can update the future row later if the price or quantity changes.

🧠 Best Practices From These Examples

Always cover the full date range with cost periods — no gaps!
Use Detailed View if you’re working with international currencies or shipment-based tracking.
Add future-dated rows to pre-empt known price changes.
Add notes to explain why a cost changed — helpful when reviewing historical performance.

🧾 Example 5: Weighted Average Cost When Old and New Units Overlap

🎯 Use case: You still have stock from a previous shipment when a new shipment arrives at a different unit cost. You want to calculate the new average cost per unit for accounting purposes.

🔢 Scenario

You sell stainless steel water bottles. You had 500 units left from an older shipment when a new shipment of 1,000 units arrives at a higher cost.

📦 Inventory On Hand:

Batch	Units	Unit Cost	Total Value
Old Batch	500	$4.00	$2,000.00
New Batch	1,000	$4.80	$4,800.00

🧮 Weighted Average Cost Per Unit

You calculate the weighted average using:

Calculation:

Weighted Average Cost = $6,800 ÷ 1,500 = $4.53

📅 COGS Entry in SellerLegend

You can now define a new cost period starting the day the new batch was received using the calculated average:

Start Date	End Date	Unit Cost	Notes
2024-01-01	2024-08-15	$4.00	Old batch
2024-08-16		$4.53	Weighted average for mixed inventory

🧠 Best Practice Tip

In SellerLegend, you cannot enter batch quantities per se — but you can use the Weighted Average Unit Cost as a proxy to reflect accurate profitability across overlapping inventory.
This approach is particularly useful if you don’t track actual inventory depletion batch-by-batch.