[Little Mountain]

I was thinking tonight that it would be nice to have these two things...

1. be able to edit last cost & price 1 for items when updating inventory with PICS. Or a way to get to the prices quickly while still in PICS.
2. be able to set up an item so it has multiple places for quantities w/ different prices for each one.

ie of 1 - when you edit the number in for pics, and then the total # coming in, being able to edit the updated prices & set margins for price 1
ie of 2 - now we have only one way to edit quantities and price. Say that we have 8 items @ a cost of $15.00 - and we buy some 10 new items at a sale price, which lowers the cost to $11.00 - I don't want to put $11 in for the price and add the 10 new ones to the 8 we had before. I'd like the first 8 to sell @ the cost of $15 and then turn over to a second price structure @ a cost of $11.00 w/ a new price. It will reflect our profits & costs more.

I hope that made sense, it is 12:30am lol

[RetailEdge Moderator]

Number one is in the list of suggestions and a good one. You're not the only one to ask this. You might want to familiarize yourself with the new Software Maintenance Plan at http://www.retailedge.com/phpBB/viewtop ... f=1&t=1647 because these updates would only be available to you if you were on the plan.

Number 2. What you are asking for is very FIFO (First In First Out) inventory pricing and does not really buy that much for most businesses. RetailEdge tracks inventory by average cost. So in your example, you would have 8 items at $15.00 and buy 10 more at a cost of $11.00. RetailEdge would calculate your inventory as having an average cost $12.78. RetailEdge uses this average cost for calculating your total inventory valuation $12.78 * 18 = 8 * $15 + 10 * $11 = $230. The average cost is then used when you sell something. Although this is an average, most businesses that we deal with can't guarantee that they are are selling the the First Item in. Take for instance a store that is selling Jackets and putting them on a rack. Can they guarantee that the customer pulls the first item they brought into inventory off the rack or the last one? Also think about how many times you reach for the Milk at the back of the cooler to get the item that has the longer expiration date. Using your example:

If I use FIFO and the customer chooses the correct item that my system thinks I am selling, obviously my inventory valuation and cost of goods sold it 100% accurate.

If I use FIFO and the customer selects one of the newer "discounted" items to buy, then the FIFO system will think I am selling something that costs $15.00 but really I am selling something that is only $11.00, so my cost of goods sold will be off more that if I use an average cost of $12.78. In addition, my inventory will be off by more than if I use average cost.

Other inventory accounting method ssome people want to use is Last In First Out (LIFO) and Last Cost. These methods have the same limitations. Using the average cost does two things:

1. It accounts for the retail reality that the business owner has limited control over which item a customer chooses and minimizes the impact that choosing the "incorrect" item causes in inventory costs and cost of goods sold.

2. Matches what a number of accounting packages use for tracking inventory costs (QuickBooks being one of them). Usually accountants are fine with using average cost as long as they know that you are doing it this way.

[Little Mountain]

#2 I would use if we buy show items which are cheaper (significantly) and we would like to lower the price while raising the margin.

[Little Mountain]

And let me make sure I'm clear - I pay $5 a month so that I can get updates after the last one for 8.0?

[RetailEdge Moderator]

The average cost should take care of things on the cost side. On the price side of things I don't think we will be changing the way it works going forward. Most retailers will take the discount to increase their margin. For instance:

1. I receive in 10 of item ABC at my cost $1.00 and set the pricing at $2.00 for a 50% margin.
2. I then receive 10 of item ABC at a discount of $0.50, I will then have a quantity of 20 in my inventory at an average cost of $0.75.

I would say most retailers would not change the price from $2.00 but would take the discount to increase their margins. So in this example they would continue to sell all items for $2.00 and if they sold all of the items they would essentially be making at (1-c/r) or 62.5% margin. If you want to have the pricing reduced on all of your items to split the difference, you can do this when you are pricing items on the purchase order. RetailEdge will show you the current average cost for the item, and so when you price the item, you would simply discount the current pricing by some amount. Be aware that if you are using barcode pricing labels in RetailEdge, you are going to have to go out
and retag all of your existing merchandise. If you are not tagging items and using the UPC on the item, then you don't have this problem.

The pricing problem cuts both ways. In your case you are getting a discount, however in some cases retailers get new product in with increased costs. Most of the time retailers increase the price of the product and go out and retag their old inventory with the new pricing. If this is an annual type thing some retailers will create new SKUs for the new product and raise the price on the new (this years) item, the old item will still be on the floor with last years price. This also works when prices and costs for items you are selling are decreasing. In the computer hardware business prices seem to be always going down. The cost of the new item coming in may be less than what you have currently in inventory and the price you can get for the product is also less. So in this case, you can't sell the old product for the old price and have to take the hit on the margin for these items.

BTW if you want to change the cost of something (for instance a show or pre-season discount on a purchase order) you should add the items onto a PO and use the discount PO function. This will discount the PO costs but will not change the last cost of the item. This leaves the current last cost in inventory so that it can be used for the next undiscounted PO.

Hope this answers your question

#2 I would use if we buy show items which are cheaper (significantly) and we would like to lower the price while raising the margin.

[RetailEdge Moderator]

It is currently anticipated that it will be $5.00/month/workstation. However, this will be formalized when 8.1 is released. Although I have not heard of any changes in the anticipated pricing, it is not final until the release date.

And let me make sure I'm clear - I pay $5 a month so that I can get updates after the last one for 8.0?