Average cost vs FIFO for your eBay profit

ProfitClerk records the cost of every item you sell in two ways at once: average cost, which blends all the units on your shelf into one cost, and FIFO (first in, first out), which uses the price of the oldest units you bought. You can switch every profit figure between the two at any time, and nothing is lost when you do.

How average cost works

Each stock item has one cost per unit: the average of everything on the shelf.

• It changes only when you restock: (units on hand × current average + what the new buy cost) ÷ (units on hand + new units).
• Selling units does not change it.
• Every sale uses the average at the moment it sold.

How FIFO works

Each time you add or restock an item, that buy becomes a lot (a layer) with its own cost per unit. Sales use up the oldest lot first, at that lot's price. If a sale needs units from two lots, its unit cost is the mix of both.

You can see an item's lots on its page under Open lots (FIFO layers), oldest first, with the one that Sells next marked.

An example

You buy 10 phone cases for 20.00 (2.00 each) and sell 5. Then you restock 10 more for 40.00 (4.00 each). You now have 15 on hand.

• Average: (5 × 2.00 + 40.00) ÷ 15 = 3.3333 per unit.
• FIFO: the 5 left from the first buy at 2.00, then the 10 new ones at 4.00.

Your next sale of one case costs 3.3333 in the average view and 2.00 in the FIFO view. Five sales later, FIFO moves on to 4.00 while the average stays at 3.3333 until you restock again.

When prices go up, FIFO shows lower item costs (and higher profit) on the next sales than average does; when prices fall it is the other way round. Once every unit of an item has sold, both views have counted much the same total cost; they differ in which sales carry it.

Where to switch

On the website

Use the Average / FIFO switch:

• on Overview, next to Cost view;
• at the top of Orders (the cost and profit columns say which view they use, for example Cost · avg);
• at the top of an order's page.

Average is the default. The choice carries over when you go from the Orders list to an order and back.

In the app

• Tap the small Avg cost / FIFO cost pill beside the figure on the Home or Money card.
• In Sales, tap the sliders button and choose Average cost or First in, first out.

The app remembers your choice between launches and reloads Home, Sales and Money with it.

The per-order switch

An order's page has its own switch, so you can compare one sale both ways without changing anything else:

• On the website, the Average / FIFO switch at the top of the order's page, and the two boxes under the breakdown that show Net profit — average view and Net profit — FIFO view side by side.
• In the app, the Avg / FIFO pill on the order's profit card. It switches that order only.

What stays the same in both views

Only the item cost changes. The gross sale, eBay fees, label, packaging, return postage and refunds are the same in both views.

• Costs are frozen at the time of sale. A restock or a quantity correction later never changes past sales in either view.
• A cost you set on an order by hand (with Edit, Add cost or a cost import) is used for both views.
• Selling more than your recorded stock: the extra units are costed at the average in both views, and the item cost is tagged Estimated. See cost confidence.
• CSV export: the Orders export always has both, in Cost (avg), Cost (FIFO), Profit (avg) and Profit (FIFO).

For more on lots and restocks, see how item costs flow into profit.