Guide
Why pallet price ÷ item count stops working
Every pallet guide teaches the same first step: divide what the pallet cost by how many items came out of it. It is the right place to start and it survives exactly one buy.
The problem is the second buy
You bought 300 units at $6.00. You sold 180 of them on a show, so that show cost you $1,080.00 in goods and you have 120 units left. Straightforward.
Then you restock: 400 more of the same thing, but the price went up and they cost $9.00 each. Now your bin holds 520 units worth $4,320.00. Divide one by the other and your unit cost is $8.31.
And there is the bug. Those 120 units from the first pallet did not get more expensive. You already paid $6.00 for them, and that money is spent. But the moment you recompute the average, they are priced at $8.31 — a cost you never paid, applied to stock you already own.
What it does to the next show
Your next show sells 200 units at $21.50, so $4,300.00 gross. What did those units cost?
Blended average
200 × $8.31
$1,661.54
Profit reads $2,638.46
Oldest units first
120 × $6.00 + 80 × $9.00
$1,440.00
Profit reads $2,860.00
$221.54 apart, on one show. The average charges that show for stock it did not sell — it sold the cheap units, the ones you bought before the price went up, and it deserves the credit for that. Do this every week and your per-show margins are noise: a show looks worse because you happened to restock before it, not because it sold worse.
The error does not cancel out, either — it moves. Later, when the old units are gone and you are selling nothing but the $9.00 stock, the same average charges too little and those shows look better than they were.
Cost layers, in plain words
The fix is not complicated, it is just bookkeeping nobody wants to do by hand. Instead of one number for the bin, keep a list of what you bought and what is left of it:
| Layer | Cost each | Left |
|---|---|---|
| First buy | $6.00 | 120 |
| Restock | $9.00 | 400 |
Sell a unit and it comes off the oldest layer that still has stock. That is all “FIFO” means here — first in, first out, as a costing rule rather than a claim about which box the packer physically grabbed. The units are interchangeable; the money is not.
It also gives you a number worth having: the cost of the next unit you sell, which is the oldest open layer. That is the figure to price against when a host is calling a bid — not a blended average that includes stock still on a truck.
Stamp the cost on the sale, not just on the bin
The other half matters as much. When a unit sells, write down what it actually coston that sale row. Do not leave the sale pointing at the bin’s current cost, because the bin’s cost keeps moving and your history will move with it.
This is what makes a margin from three months ago still true today. A report that recalculates old shows against today’s stock is not a record, it is a simulation — and it will quietly disagree with itself every time you buy a pallet.
How LASI does it
A bin of unmanifested units carries exactly the layer list above. Receiving stock appends a layer at what you paid. Selling consumes the oldest layers first and returns the exact cost of the units that went, which is stamped on the sale. The bin’s headline cost is the next unit’s cost, so the price a host works from is the real one.
Un-selling is the mirror: a cancelled order or a returned unit goes back at the cost it left with, so nothing drifts. Barcoded items work the other way — one row per unit, each carrying its own purchase cost, because with a manifest you know exactly which one sold.