Buying by the carton, selling by the piece
One of the most ordinary things a shop does is also one of the most common sources of a wrong stock figure: buying in one unit and selling in another.
One product, two units
You buy soap in cartons of 24 and sell it in bars. The supplier invoices cartons. The customer buys bars. The stock record has to hold one of those as the truth and derive the other.
The answer is almost always to hold the selling unit as the stock unit — the bar — and treat the carton as a purchasing convenience with a conversion factor. Holding cartons and deriving bars breaks the moment you have a part-used carton, which is immediately.
Inferring the piece cost
| Cartons purchased | 50 |
| Pieces per carton | 24 |
| Pieces received | 1,200 |
| Invoice value, net of recoverable VAT | 54,000 birr |
| Freight and duty allocated to this line | 3,600 birr |
| Total cost of stock | 57,600 birr |
| Cost per piece | 48.00 birr |
Note that the landed costs go in before the division, not after. Dividing the invoice by 1,200 to get 45.00 and then trying to remember to add freight later is how a line ends up with two different costs depending on who looked at it.
What breaks when the pack size changes
Suppliers change pack sizes, and they rarely announce it as a change. The carton of 24 becomes a carton of 20 at a slightly lower price, and the piece cost moves without anyone deciding it should.
| Before | After | |
|---|---|---|
| Pieces per carton | 24 | 20 |
| Carton cost | 1,080 birr | 960 birr |
| Cost per piece | 45.00 birr | 48.00 birr |
| Apparent change on the invoice | — | 11% cheaper per carton |
| Actual change in unit cost | — | 6.7% more expensive |
A buyer looking at carton prices sees a discount. The margin, which is computed per piece, quietly falls. This is a real and routine tactic, and the only defence is that the conversion factor is recorded against the purchase rather than against the product.
Partial cartons and the count
At a count, the shelf holds nine full cartons and seven loose bars. If the stock unit is the bar, that is 9 × 24 + 7 = 223, and the person counting needs to be able to enter it that way — as cartons and loose pieces — rather than doing the multiplication on a phone and typing a total.
The reason is not convenience. It is that a count entered as "9 cartons, 7 loose" can be checked and re-derived if the conversion turns out to be wrong; a count entered as "223" cannot.
Selling both ways
Many businesses sell both the piece and the carton — retail at the counter, wholesale to a small trader. That works cleanly if the carton is a price and a conversion applied at the point of sale, drawing down 24 pieces of the same stock item. It goes wrong if the carton is set up as a separate product, because then you hold two balances of the same goods and neither is right.
Sources
Figures on this site are attributed to the organisation that published them, with a link. Where sources disagree, we say so rather than choosing the flattering number.