Purchase Order Landed Cost (Stitch X)

Last Updated: Nov 05, 2018 02:54PM PST
Using purchase orders on Stitch X, you can capture the true "landed" cost of inventory, giving you better insight into product margins and cost of good sold.

Note: This feature is available only on Stitch X Premium plans.

How Stitch calculates landed cost

Stitch calculates inventory cost as follows:

 

Landed Cost = Original Cost - Discounts + Additional Cost

Final Cost = Landed Cost + Sales Tax

 

Each cost input is described in greater detail below.

Adjusting cost on purchase orders

You can adjust cost and view cost breakdowns when creating and editing ship notices.

To view or adjust cost for a single line item, click on the line item cost:

To adjust cost in bulk, click Adjust Cost, select the line items requiring a cost adjustment, then click Adjust Selected:

Entering original cost

Original cost is what you enter in the Unit Cost field:

To pre-fill this field with default costs, use supplier/variant associations.

To account for purchases made in another currency, use currency conversion

Adding discounts

Discounts are calculated against the original unit cost—not subsequent costs. To enter a discount, click on the line item amount, then click Add Discount:

Enter these as a percentage of the line item total (ex: 5%) or as an absolute amount (ex: $100).

Adding costs

Add and distribute costs via pre-defined types:

Cost types

Type Notes
Sales tax Percentage applied to each unit. Not included in the landed cost calculation.

If the item is subject to multiple tax rates (ex: 7% CA tax, 1.5% SF tax), combine into a single ta rate (ex: 8.5%).
Materials and manufacturing  
Shipping and handling  
Customs and tariffs  
Risk and compliance  
Overhead  
Other Stitch includes other costs in its calculation of landed cost.

You can add a description for each cost type. This isn't currently exposed in the application, but we intend to make that information reportable/accessible in the future. If you would like to access this info, please reach out to your Stitch success manager and ask to speak with a product manager.

Distribution types

Type Notes
Quantity In the case there are multiple line items associated to a cost distribution, the total amount of the cost distribution is distributed to line items based on the ratio of the quantity of each line item to the total quantity of units of all line items associated to the cost distribution.
Percentage Applied as a percentage of the discounted first unit cost
Weight In the case there are multiple line items associated to a cost distribution, the total amount of the cost distribution is distributed to line items based on the ratio of the total weight of each line item (unit weight * quantity) to the total weight of all line items associated to the cost distribution.
Value In the case there are multiple line items associated to a cost distribution, the total amount of the cost distribution is distributed to line items based on the ratio of the total first cost of each line item (first cost * quantity) to the total first cost of all line items associated to the cost distribution.
Fixed amount Applies the provided amount as a unit cost to each line item

Reporting on landed cost

To view purchase order landed cost (along with original cost, additional cost, tax, and discounts), see the Ship Notice Line Items report, accessible via Reports > PO Reports.

FAQs

What If I distribute by cost or unit, and then a line item quantity is edited and/or line items are removed?

Original line items retain their per-unit cost; Stitch doesn't redistribute costs.

What happens when distributing by cost and the cost of the distribution source is changed?

Original line items retain their per-unit cost; Stitch doesn't redistribute costs.

What happens when moving units to another ship notice?

The line items should retain their costs when added to the new ship notice.

What happens to distributed costs when more/less units are received than expected?

Line items retain their per-unit cost. Stitch doesn't redistribute costs

Where does sales tax fit into this?

Sales tax works exactly like other costs with a percentage distribution type, except that it doesn't apply to landed cost.