Hi Everyone! Thanks in advance for all the great advice.
I recently started a new business, and like most didn't do proper research beforehand. My business involves buying surplus or closeout merchandise by the pallet load. On these pallets there may be 100 items with only a few of the same kind. Different brands, different products, etc. Some of the items are immediately thrown away after purchase due to damage or other poor qualities. I pay only for the entire pallet, not the individual items on the pallet. I then turn around and resell the individual items at an e-store.
My first question is how on earth do I calculate a cost for these individual items that I've sold? When trying to figure Cost of Goods Sold for Schedule C, I have no idea how to approach it.
Secondly, Many of the pallets I purchase do not have a written manifest of items on the pallet. Also, many of these are auction style sales where cash is king and no receipts are written. It seems that there is no perfect way to keep up with my inventory purchases. Any ideas for best practices in my situation?
My accounting skills are very low, but I'm trying to learn. Any guidance will be very appreciated.
Thanks!
Terry
I recently started a new business, and like most didn't do proper research beforehand. My business involves buying surplus or closeout merchandise by the pallet load. On these pallets there may be 100 items with only a few of the same kind. Different brands, different products, etc. Some of the items are immediately thrown away after purchase due to damage or other poor qualities. I pay only for the entire pallet, not the individual items on the pallet. I then turn around and resell the individual items at an e-store.
My first question is how on earth do I calculate a cost for these individual items that I've sold? When trying to figure Cost of Goods Sold for Schedule C, I have no idea how to approach it.
Secondly, Many of the pallets I purchase do not have a written manifest of items on the pallet. Also, many of these are auction style sales where cash is king and no receipts are written. It seems that there is no perfect way to keep up with my inventory purchases. Any ideas for best practices in my situation?
My accounting skills are very low, but I'm trying to learn. Any guidance will be very appreciated.
Thanks!
Terry