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Last Post Mar 28, 2007 1:04 PM by: deirdre@ebay.com
Replies: 65
deirdre@ebay.com
Posts: 3,846

Member Workshop: What is “Cost of Goods Sold” - March 28

Feb 27, 2007 2:20 PM
Topic: Member Workshop: What is “Cost of Goods Sold” and does it affect your eBay business?

Host: keepmore
Date: Wednesday 03/28
Time: 12:00 p.m. to 1:00 p.m. Pacific time
Location: Workshop Board

Description: I am constantly asked ‘What does Cost of Goods Sold mean?”; “How do I track it?”; and, “How will it affect my eBay business profits?”. Please join me, Phyllis Wischer, for our next workshop covering the topic of ‘Cost of Goods Sold’. As the inspirational founder behind KeepMore.net, and a passionate advocate of small business in America, my direction in life, and for KeepMore.net, is guided by what makes small business successful. Knowing how to handle Cost of Goods Sold is a very important function for the eBay business owner.

Cheers,

Deirdre
eBay Community Development
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jetstover
Posts: 16
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:07 PM
How do I account for my "loser" items at the end of the year. I usually donate them to Goodwill. Can I take a deduction for that and is it a business deduction or a personal deduction? Seems like busines to me since I purchased them with business funds.
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keepmore
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:08 PM
tommydland - great question. If the items are returned to you, you just deduct the cot of the item from your cost of goods (or inventory). If there is more to your question just let me know.
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tommydland
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:10 PM
Let's say I drop and break 5 items before I ship them, how do I account for them?
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keepmore
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:10 PM
zephyr350 - thanks for the question. Please refer back to post #5. I believe that I have covered that subject for you.
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cheddarsoup
Posts: 5
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:11 PM
On the issue of buying in bulk... I've been calculating my COGS for each item by taking the amount I paid for the lot and dividing by the number of saleable items, not counting the items I can't use and generally just end up throwing away. Is this correct?
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keepmore
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:11 PM
jetstover: please reference back to posts #7 & 9, and let us know if you still have questions.
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jetstover
Posts: 16
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:12 PM
I was reading the archives and saw your info that ebay and paypal fees should be part of COGS. How exactly do you enter that information into your program? I have expensing the fees--ebay as advertising and paypal as bank fees.
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keepmore
Posts: 588
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:14 PM
tommydland - the items that are broke are just a subtraction from your total purchases. If you purchased a case of items at $10 per item - 10 items or $100.00 total - then you would need to subtract $50.00 from your cost.
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keepmore
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:15 PM
jetstover: just re-read your question.

If the item is for your business, you should record the amount you paid for the item, and that price is your deduction. When you donate the item, there is no additional deduction for that item. Doing so would be like taking the deduction twice, which is not allowed.
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jetstover
Posts: 16
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:16 PM
jetstover: please reference back to posts #7 & 9, and let us know if you still have questions.

I can only see Posts beginning with #14. Can you tell me if I am doing something wrong and how to access the posts before #14?
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rightdealauctions
Posts: 1
(25 of 65)

Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:16 PM
So thge short answer to what the IRS requires is sales minus perchases minus cost of year ending unsold inventory = Gross profit from sales. Correct? Then minus other operating expenses?
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tommydland
Posts: 4
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:17 PM
Thanks for your answers keepmore. Let's say instead of breaking those 5 items, I use them in a research and developement. Like I were to test them for quality or something like that, can I then deduct those costs?
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keepmore
Posts: 588
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:18 PM
cheddarsoup - That is the correct calculation if you are wanting to track the cost and sale of each item sold. If you do not care about tracking each individual item then you can track the cost of the bulk purchase and the income from the sale of those items in a lump sum.
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deirdre@ebay.com
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:19 PM
Hi jetstover:

To expand the page (which allows you to see all the posts), click on the colored page number just above the "Post a reply" box or if you see a 'previous' link, click on that.

Thanks,

Deirdre
eBay Community Development
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jetstover
Posts: 16
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Member Workshop: What is “Cost of Goods Sold” - March 28

Mar 28, 2007 12:19 PM
Sorry--your information consists of the earlier posts. Duh! I appreciate your answers. Sorry for the one about not seeing the posts. I found them!
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