Finance for Ecommerce and DTC Brands

Inventory and COGS Accounting

• Cost of goods sold includes landed product cost, inbound freight, duties, and fulfillment, not just the factory unit price.
• Choose a costing method such as weighted average or FIFO and apply it consistently, since it shifts margin between periods.
• Capitalize inventory on the balance sheet and expense it only when the unit sells, so growth ties up cash before it earns profit.
• Reserve for shrinkage, returns, and obsolescence, because slow-moving stock quietly destroys margin and clogs your working capital.