Tracking COGS and Inventory the Right Way as a Meesho Seller
Accurate cost of goods sold is the foundation of every profit number. This guide shows Meesho sellers how to track COGS, handle changing supplier prices, and value inventory.
Every margin calculation, pricing decision, and "which SKU should I keep" judgement rests on one number: cost of goods sold. Get COGS wrong and the most sophisticated P&L on earth is just confident nonsense. Here is how to track it properly.
What actually belongs in COGS
COGS is the cost to get one sellable unit into your hands, ready to ship. It includes:
- Supplier price per unit.
- Inbound freight to bring stock to you, allocated per unit.
- Import or sourcing fees, if any.
- Unsellable rate — a small allowance for damaged or defective units you cannot sell.
It does not include packaging, platform fees, or shipping to the buyer — those are separate cost layers in your P&L. Keep COGS clean so each cost stays attributable.
The moving-price problem
Supplier prices change. You buy a batch at ₹150, the next at ₹165. Which cost do you assign to a sale? Three common methods:
- Last cost. Use the most recent purchase price. Simple, but overstates or understates profit when prices swing.
- Weighted average. Total spend on the SKU ÷ total units bought. Smooths out swings and is the most practical for most small sellers.
- FIFO (first in, first out). Assign the oldest batch's cost first. Most accurate, more bookkeeping.
For most Meesho sellers, weighted average is the right default: accurate enough, easy to maintain, and stable from cycle to cycle.
A weighted-average example
| Purchase | Units × price |
|---|---|
| Batch 1 | 100 × ₹150 = ₹15,000 |
| Batch 2 | 60 × ₹165 = ₹9,900 |
| Totals | 160 units, ₹24,900 |
| Weighted-average COGS | ₹ 155.63 / unit |
Use ₹155.63 as the COGS for every unit of that SKU until the next purchase changes the average. Recalculate when you restock.
A simple inventory ledger
You do not need accounting software. A spreadsheet with one row per purchase works:
- Date, SKU, units bought, price per unit, total spend.
- A running units-on-hand column.
- A running weighted-average cost column.
Each sale decrements units on hand at the current average cost. This single ledger answers two questions at once: what does a unit cost, and how much stock do I have left?
Why stock-on-hand matters for profit
Capital tied up in slow-moving inventory is a hidden cost. A SKU with a healthy margin but a six-month sell-through is locking up cash you could deploy on faster movers. Track sell-through rate alongside margin so you can spot products that look profitable on paper but starve the business of working capital.
Connect COGS to your settlement data
The payment report tells you what Meesho paid; your COGS ledger tells you what each unit cost. Net profit only appears when you join the two. The cleanest workflow:
- Maintain weighted-average COGS per SKU in your ledger.
- Each cycle, pull the payment report's settlement per SKU.
- Subtract COGS, packaging, and allocated RTO to get true net.
Meesho Profit lets you store a cost per item once and applies it across every uploaded report, so you maintain COGS in one place and get accurate net profit automatically. Set your item costs and upload a file to see it join up.