What Is Period-Based Cost of Goods?
Core Concept
Period-Based Cost of Goods (COGS) is SellerLegend's time-based system for tracking your product costs. Rather than using a single static cost figure, you define different cost values for different time periods, reflecting how your actual expenses change over time.
What Comprises COGS
The total cost to bring a product to market includes multiple cost components:
- Manufacturing costs
- Printing and packaging
- Labelling
- Shipping and freight
- Customs and duties
- Quality inspection
- Handling and prep
- Other product-related expenses
Each component must be converted to a per-unit cost for calculation purposes.
Cost Periods Defined
A cost period is a date range with a specific unit cost. Each period contains:
- A start date
- An end date (optional for ongoing periods)
- A unit cost value
- Optional notes and provider information
The system matches each order to the correct COGS based on the order's date.
Why This Matters
Costs fluctuate due to:
- Manufacturer price changes
- Shipping variations
- Quantity discounts
- Inspection frequency
- Currency exchange rates
Period-based tracking ensures your profit calculations reflect actual costs at the time of sale, maintaining accuracy across volatile business environments.
Key Benefit
SellerLegend automatically reassigns orders to the correct cost period and recalculates profits instantly when COGS data changes, eliminating manual adjustments and maintaining historical accuracy.