Need serious math formula help

**goodcents** · 02-18-2008, 11:47 AM

I need a formula to solve this problem- Say I get an order from a vendor and it comes up to like $231.98 and shipping was $15.93, how would you figure out what to add to each item to make an exact wholesale product cost. I have been just listing on the hidden part of price tag the cost of the product w/o adding in shipping but I'm starting to get alot of low cost small products and I hate being off

I need a formula to solve this everytime I get an order so I will know to the penny or even parts of a cent on some things.I thought of splitting it even between the # of products but it wouldn't be even since an $80 gold earring would not be the same as a $1 spare part

Please help, I know there's an easy formula

**goodcents** · 02-18-2008, 11:58 AM

Come on guys, I have orders setting in boxes and I don't want to redue them later

**goodcents** · 02-18-2008, 11:58 AM

Lets use that college education

**Hollywood080** · 02-18-2008, 11:59 AM

why don't you add the cost of shipping to your overall order then do it the same as you normally would?

**goodcents** · 02-18-2008, 12:06 PM

Originally Posted by Hollywood080

why don't you add the cost of shipping to your overall order then do it the same as you normally would?

I kind of follow you but how would you know what to make each item? some things cost $50 or more and some are .10 parts (10 cents) in the same order

You wouldn't want to make the 10 cent item like $2.75 if you split it evenly

**goodcents** · 02-18-2008, 12:07 PM

I'm thinking something like each dollar of product would be so much shipping? but I need a formula since it's never even to the dollar

**goodcents** · 02-18-2008, 12:18 PM

Help

**rockinred** · 02-18-2008, 12:22 PM

well first off I don't think you can break down each shipping cost for each item with a universal formula for the following reasons.

1)shipping cost vary from origin to destination.
2)shipping cost vary on weight and size
3)shipping costs vary on method shipped
4)shipping costs vary when shipped in bulk as oppose to one item... like you stated previously. If you ordered a box of earings as oppose to one it doesn't equate the same...

I am not sure I am quite following what your asking. Are you itemizing this stuff for your accounting books?

**goodcents** · 02-18-2008, 12:38 PM

Originally Posted by rockinred

well first off I don't think you can break down each shipping cost for each item with a universal formula for the following reasons.

1)shipping cost vary from origin to destination.
2)shipping cost vary on weight and size
3)shipping costs vary on method shipped
4)shipping costs vary when shipped in bulk as oppose to one item... like you stated previously. If you ordered a box of earings as oppose to one it doesn't equate the same...

I am not sure I am quite following what your asking. Are you itemizing this stuff for your accounting books?

That and on the price tag it has 2 lines. The top one is the price we paid (we code it by adding 100

) and the bottom one is the selling price. I am about to get a point of sale system to make it easier and would like the exact amount. I think there is still a system, example:
Here is one order in front of me-
subtotal before shipping $157.56
shipping charge-$10.50
Total-168.06

so just a rough draft-round up to 158 and devide 10.50 by 158 to get .06646 so each dollar of product before tax would get added .06646 so a $20 product would actually cost 21.33? I know I'm very close but want the exact amount (I know I'm picky but times thousands of small items sold equals alot

)

**goodcents** · 02-18-2008, 12:39 PM

I know the amounts will change each time but I think the formula would stay the same?

**goodcents** · 02-18-2008, 12:44 PM

I just redid it with 10.50 divided by 157.56 and got .0666412, does that seem right to you guys? how far would be good to take the extra out? maybe all or like .0666?so I figure a $20 item would come out to 21.332?

**goodcents** · 02-18-2008, 12:46 PM

Lets try a harder one, unit cost is 23.49 before shipping. So I take it times 1.0666 which =$25.054. whoo hoo I think I solved it?

**rockinred** · 02-18-2008, 12:46 PM

right, but that is simple math to get the shipping cost for each order by dividing that specific order. I thought you wanted a formula for all your product... which is impossible unless you are shipping the exact same thing to the exact same place all the time. that is the only way.

The reason I was asking about the accouning books is that from an accounting perspective you would just itemize the shipping in the expenses section and have it weighed against the revenue, etc...

**Pooks** · 02-18-2008, 12:48 PM

add a percentage to every object instead of a fixed cost..

but that could be annoying to do..

u could break it down by brackets..

like objects under $1 u add a certain fixed price to it.
and etc..

but also seems like way to much work hehe...

as long as u make a profit at the end of the year when u add up your expenses and profits I think u're good.

I tried, LOL

**goodcents** · 02-18-2008, 12:49 PM

Originally Posted by rockinred

right, but that is simple math to get the shipping cost for each order by dividing that specific order. I thought you wanted a formula for all your product... which is impossible unless you are shipping the exact same thing to the exact same place all the time. that is the only way.

The reason I was asking about the accouning books is that from an accounting perspective you would just itemize the shipping in the expenses section and have it weighed against the revenue, etc...

Me feel dumb now

I need to learn this stuff since I will be getting pos equipment soon

That's a heart attack waiting

**goodcents** · 02-18-2008, 12:51 PM

I pitty whatever account rep they send out to train me

**goodcents** · 02-18-2008, 12:51 PM

Probably blame it on roid rage too

**goodcents** · 02-18-2008, 12:53 PM

Thanks guys, I guess I just needed to work it out

**goodcents** · 02-18-2008, 12:55 PM

Here's another problem, some times they throw in stuff for free. Would you divide it up into the total cost or say fuk it and not count it?

**goodcents** · 02-18-2008, 12:56 PM

See the shlt I deal with

on top of dumb ass members wanting something!!!!!!!!!

**goodcents** · 02-18-2008, 12:59 PM

Originally Posted by rockinred

right, but that is simple math to get the shipping cost for each order by dividing that specific order. I thought you wanted a formula for all your product... which is impossible unless you are shipping the exact same thing to the exact same place all the time. that is the only way.

The reason I was asking about the accouning books is that from an accounting perspective you would just itemize the shipping in the expenses section and have it weighed against the revenue, etc...

me-

took me all morning

**rockinred** · 02-18-2008, 01:01 PM

Originally Posted by goodcents

me-

took me all morning

dude don't even sweat it... you are on to what you are wanting to figure... accounting sucs if you ask me... that is why they hav software so you can just input the data and it puts it in the bucket you need... look into software, that is the better way.

**solid-d** · 02-18-2008, 06:33 PM

Goodsence.. Do you like the sound of your own voice.. Seems like to talk to yourself alot.. Postwhore...

**goodcents** · 02-18-2008, 07:12 PM

Originally Posted by solid-d

Goodsence.. Do you like the sound of your own voice.. Seems like to talk to yourself alot.. Postwhore...

I do talk to myself alot, most business owners do

good way to solve a problem, talk it out

**goodcents** · 02-18-2008, 07:13 PM

Btw, it's Goodcents ( I was eating a sub from goodcents sub shop

)

**Prada** · 02-18-2008, 09:47 PM

Originally Posted by goodcents

Here's another problem, some times they throw in stuff for free. Would you divide it up into the total cost or say fuk it and not count it?

Again from an accounting perspective if your assets or liabilities are affected then yes you should document it, if not feel free to do whatever. Meaning if you get it for free and you give it for free, doesnt really matter. Then again assuming your a sole proprietor ....not necessary.

**sphincter** · 02-19-2008, 05:01 PM

IMO unless you want to get really technical about it I would divide shipping cost across all products in that shipment, then add that amt to the sholesale cost plus whatever margin you need to burden products with to cover costs and profit.. EG 10$ earrings plus $/40 shipping cost avg plus 47% burden rate markup + $10.40*1.47= $15.29 for the $10 earrings 47% should be enough to cover your marketing costs, expenditures, overhead and some profit... of course, I just pulled that number out of my ass but I would do it something like that.

You should have more data so that you could more accurately avg the shipping charges across the items more fairly or just mark them up 3-7 % more that way the cost of the item drives the shipping burden you give it. Tat won't be 100% accurate as size/weight drive shipping more than cost but it will be as close as you can get without getting crazy technical on it.

so, you should know how much % of your money goes to rent, lights, salaries, phones, shelving, whatever you need to operate in business, this is your burden rate and that's what you multiply the wholesale cost by to get retail minimum charge you need to stay in business. you'll also need to add in something for profit as a % of the burdened price of the item.

**sphincter** · 02-19-2008, 05:02 PM

Originally Posted by Prada

Again from an accounting perspective if your assets or liabilities are affected then yes you should document it, if not feel free to do whatever. Meaning if you get it for free and you give it for free, doesnt really matter. Then again assuming your a sole proprietor ....not necessary.

definitely should count it as the money is coming in and will need to be accounted for properly even if it is just to be written off as something you gave away as marketing or discounted item or whatever..

**sphincter** · 02-19-2008, 05:06 PM

Originally Posted by goodcents

That and on the price tag it has 2 lines. The top one is the price we paid (we code it by adding 100

) and the bottom one is the selling price. I am about to get a point of sale system to make it easier and would like the exact amount. I think there is still a system, example:
Here is one order in front of me-
subtotal before shipping $157.56
shipping charge-$10.50
Total-168.06

so just a rough draft-round up to 158 and devide 10.50 by 158 to get .06646 so each dollar of product before tax would get added .06646 so a $20 product would actually cost 21.33? I know I'm very close but want the exact amount (I know I'm picky but times thousands of small items sold equals alot

)

yes when your are dealing in large quantity the small numbers add up fast but as long as you are competetive in the marketplace, round up in your favor and in the end you will have made more money than you projected but still be well placed in the market with respect to price.

**Prada** · 02-19-2008, 05:20 PM

Originally Posted by sphincter

definitely should count it as the money is coming in and will need to be accounted for properly even if it is just to be written off as something you gave away as marketing or discounted item or whatever..

Obviously accounting practices, respecting GAAP, between corporations and our friend Goodcents differ.

**goodcents** · 02-19-2008, 07:07 PM

My businesses are incorporated.

**sphincter** · 02-20-2008, 12:16 PM

so get the numbers "close enough", using the percentages mentioned above but using numbers that work for your overhead costs, burden costs, profit margin, and market placement and the nerror on the side of profit and you'll be in great shape year end and it'll be no headaceh when you have to explain to your accountat what happened and how you got there.