When setting up a Product and Product Variant, you'll notice more than one field for cost in the Pricing and Costs section. Here's why we provide more than one:
- Cost reflects the dealer/vendor price that is usually listed on a price sheet.
- Net Cost Formula can be set up to calculate various discounts from the cost field. Standard mathematic operators can be used, and 'cost' can be used as a variable. For example, the formula entered in the following net cost formula field will multiply the cost by .95 (5% discount), and then subtract $9.65 (rebate).
- Net Cost is the result of the Net Cost Formula
If you don't receive discounts or rebates above the dealer cost, no problem. Just leave the net cost formula blank and the net cost field will match the cost field.
Net cost is the cost used to calculate margin throughout the application. Since margin is the percentage of the sale price that is profit, the formula we use is:
(price - net cost)/price