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Cost of Inventory Calculator from Profits+Plus

Go to a trade show, or receive a special order offering from a vendor, as you are trying to decide how to place an order for merchandise:
Order a smaller quantity, but pay a higher price, a shorter time to pay for the merchandise and maybe pay a higher price for the delivery of the merchandise

Order with the special offering, and you receive a much longer time to pay for the merchandise, perhaps free freight, but you have to purchase a much larger quantity of merchandise.

Which way is more profitable for your business? Previously, you had to perform a lot of calculations or just take a good guess.

We now provide you with a Cost of Inventory calculator. You enter this information:
How many you sell each month
The cost when ordering in the traditional method and in the special order methods
The cost of freight for each of the two methods
The quantity you order with each method
The cost of money

When using the Cost of Inventory calculator, enter this information, click enter, and you will see the answer for each of the next eight months. You also have the option of seeing this information in a line chart format.

As you create the initial calculated gross margin, the cost of the freight is not a component of that calculation. However, as you look at the calculations for the 60 to 240 day time period, we take a different approach. As you would have paid for the freight, and there is an anticipated difference in the freight cost of the two buying scenarios, we allow the freight to be utilized as a component of the gross margin calculation.

(Enter data in the column of cells highlighted in green)

Press this button to load test data -->
   
 Selling price of product
   
Cost of the product purchased in traditional manner:  
 Cost of the product
 Cost of freight per item
 Landed cost of the product purchased in traditional manner
 Number of days to pay invoice in traditional manner
   
 Initial gross margin of the product purchased in traditional manner
   
Cost of the product purchased in drop ship or special manner:  
 Cost of the product
 Cost of freight per item
 Landed cost of the product purchased in drop ship or special manner
 Number of days to pay invoice in drop ship or special manner
   
Initial gross margin of the product purchased in drop ship or special manner
   
 Quantity traditionally purchased
   
 Quantity ordered for drop ship or special manner
   
 Average quantity sold per month
   
 Current cost of money borrowed (Annual interest rate)
Detailed Analysis
 Quantity on shelf 60 days after invoice - traditional
 60 days after invoice, cost of product on shelf purchased traditional
 60 days after invoice, new gross margin of product purchased traditional
 60 days after invoice, change in gross margin on product purchased traditional
 60 days after invoice, lost profit on remaining product purchased traditional
 Quantity on shelf 60 days after invoice - drop ship or special manner
 60 days after invoice, cost of product on shelf purchased drop ship or special manner
 60 days after invoice, new gross margin for product purchased drop ship or special manner
 60 days after invoice, change in gross margin on product purchased drop ship or special manner
 60 days after invoice, lost profit on remaining product purchased drop ship or special manner
 
 Quantity on shelf 90 days after invoice - traditional
 90 days after invoice, cost of product on shelf purchased traditional
 90 days after invoice, new gross margin of product purchased traditional
 90 days after invoice, change in gross margin on product purchased traditional
 90 days after invoice, lost profit on remaining product purchased traditional
 Quantity on shelf 90 days after invoice - drop ship or special manner
 90 days after invoice, cost of product on shelf purchased drop ship or special manner
 90 days after invoice, new gross margin of product purchased drop ship or special manner
 90 days after invoice, change in gross margin on product purchased drop ship or special manner
 90 days after invoice, lost profit on remaining product purchased drop ship or special manner
 
 Quantity on shelf 120 days after invoice - traditional
 120 days after invoice, cost of product on shelf purchased traditional
 120 days after invoice, new gross margin of product purchased traditional
 120 days after invoice, change in gross margin on product purchased traditional
 120 days after invoice, lost profit on remaining product purchased traditional
 Quantity on shelf 120 days after invoice - drop ship or special manner
 120 days after invoice, cost of product on shelf purchased drop ship or special manner
 120 days after invoice, new gross margin of product purchased drop ship or special manner
 120 days after invoice, change in gross margin on product purchased drop ship or special manner
 120 days after invoice, lost profit on remaining product purchased drop ship or special manner
 
 Quantity on shelf 150 days after invoice - traditional
 150 days after invoice, cost of product on shelf purchased traditional
 150 days after invoice, new gross margin of product purchased traditional
 150 days after invoice, change in gross margin on product purchased traditional
 150 days after invoice, lost profit on remaining product purchased traditional
 Quantity on shelf 150 days after invoice - drop ship or special manner
 150 days after invoice, cost of product on shelf purchased drop ship or special manner
 150 days after invoice, new gross margin of product purchased drop ship or special manner
 150 days after invoice, change in gross margin on product purchased drop ship or special manner
 150 days after invoice, lost profit on remaining product purchased drop ship or special manner
 
 Quantity on shelf 180 days after invoice - traditional
 180 days after invoice, cost of product on shelf purchased traditional
 180 days after invoice, new gross margin of product purchased traditional
 180 days after invoice, change in gross margin on product purchased traditional
 180 days after invoice, lost profit on remaining product purchased traditional
 Quantity on shelf 180 days after invoice - drop ship or special manner
 180 days after invoice, cost of product on shelf purchased drop ship or special manner
 180 days after invoice, new gross margin of product purchased drop ship or special manner
 180 days after invoice, change in gross margin on product purchased drop ship or special manner
 180 days after invoice, lost profit on remaining product purchased drop ship or special manner
 
 Quantity on shelf 210 days after invoice - traditional
 210 days after invoice, cost of product on shelf purchased traditional
 210 days after invoice, new gross margin of product purchased traditional
 210 days after invoice, change in gross margin on product purchased traditional
 210 days after invoice, lost profit on remaining product purchased traditional
 Quantity on shelf 210 days after invoice - drop ship or special manner
 210 days after invoice, cost of product on shelf purchased drop ship or special manner
 210 days after invoice, new gross margin of product purchased drop ship or special manner
 210 days after invoice, change in gross margin on product purchased drop ship or special manner
 210 days after invoice, lost profit on remaining product purchased drop ship or special manner
 
 Quantity on shelf 240 days after invoice - traditional
 240 days after invoice, cost of product on shelf purchased traditional
 240 days after invoice, new gross margin of product purchased traditional
 240 days after invoice, change in gross margin on product purchased traditional
 240 days after invoice, lost profit on remaining product purchased traditional
 Quantity on shelf 240 days after invoice - drop ship or special manner
 240 days after invoice, cost of product on shelf purchased drop ship or special manner
 240 days after invoice, new gross margin of product purchased drop ship or special manner
 240 days after invoice, change in gross margin on product purchased drop ship or special manner
 240 days after invoice, lost profit on remaining product purchased drop ship or special manner
 
 
 
 
 
 
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