Product economics that move with the business.
Track how changes in product cost, price, returns, and operating expenses affect modeled profitability and advertising thresholds.
Costs, price periods, the return policy and expenses are configured by the customer and labelled ASSUMPTION — they are not assumed to be supplied by Amazon. Profit is modeled: it is not GAAP profit, accounting net income or taxable profit.
COGS Management
Each product carries a cost method and immutable cost versions; adding a version previews its effect on unit cost, break-even and automation before it is saved.
- A costing method per product: constant, period-based, batch-based, FIFO, weighted average or marketplace-specific
- Cost versions are immutable; adding one previews its effect on unit cost, break-even and automation first
- Applied to the units actually sold, day by day
- COGS is customer-configured — it never comes from Amazon
Why it matters: Profit and break-even follow the real cost of each sale, not one static percentage.
COGS methods
- 3 products
Constant
One unit cost for every sale date; a new version replaces it for all dates.
- 1 product
Period-based
Cost by sale date: each day's sales carry the version whose period contains the day.
- 1 product
Batch-based
Each batch costs the sales from the day it goes on sale until the next batch starts.
- 2 products
FIFO
Units sell from the oldest purchase layer first; one day's sales can cross two layers.
- 1 product
Weighted average
Units sell from every received layer in proportion, so the unit cost is the average of the stock on hand.
- 0 products
Marketplace-specific
Like period-based, with one cost set per marketplace in its own currency (never converted).
Landed Cost
Eight landed cost components are kept per cost version, so a freight or duty change is visible on its own line.
- Product or manufacturing cost, packaging, international freight, duty and inspection
- Prep and labeling, inbound freight to FBA and other landed costs
- Each component stays on its own line, so a freight or duty change is visible
- The sum is the landed COGS used for profit and break-even
Why it matters: A supplier price is only part of what a unit really costs.
Landed cost
- Product (supplier price)
- $8.50
- Packaging
- $0.74
- International freight
- $1.11
- Duty
- $0.49
- Inspection
- $0.12
- Prep and labeling
- $0.37
- Inbound freight to FBA
- $0.87
- Other landed costs
- $0.24
Landed COGS ASSUMPTION: customer-configured input, not provided by Amazon
$12.44
COGS History
Cost versions have effective dates and reasons; the unit cost of each day's sales is shown, and cost changes appear in the Change Log with undo.
- Every cost version keeps its effective date and reason
- A correction adds a version instead of overwriting history
- Each day's sales carry the cost that was in effect that day
- Cost changes are recorded in the change log and can be undone
Why it matters: Past profit never changes silently when a new invoice arrives.
COGS history
FIFO Cost Layers
Layer methods (FIFO and weighted average) track what each purchase layer still holds; a newer, more expensive layer changes nothing until its units start selling. Units sold come from seller sales context where authorized.
- Each purchase layer keeps its received quantity, unit cost and what it still holds
- Sales consume the oldest layer first; one day's sales can cross two layers
- A newer, more expensive layer changes nothing until its units start selling
- Units sold come from seller sales context, where authorized
Why it matters: A price increase from the supplier reaches profit when those units sell — not before.
FIFO cost layers
Price History
Each price period has a list price, an optional coupon and a reason; profit and break-even follow the price each unit sold at.
- Price periods per product, each with a list price, an optional coupon and a reason
- A new price applies from its start date onward — past prices never change
- Profit and break-even follow the price each unit actually sold at
Why it matters: A price cut lowers break-even ACoS just as a cost increase does, and both stay visible.
Price history
Cost / Price Regimes
Units, revenue, refunds, COGS, ad spend, contribution, modeled net profit, margin and TACoS per regime, so a price effect and a cost effect can be told apart.
- Runs of days with the same price and the same cost
- Units, revenue, refunds, COGS, ad spend, contribution, modeled net profit, margin and TACoS per regime
- A price effect and a cost effect can be told apart
Why it matters: When profit moves, the regime view shows whether price or cost moved it.
Cost / price regimes
Return-Aware Profitability
A return policy sets the share of returned units that go back to inventory; the rest are written off at their cost, and refund rates are tracked per product.
- Refunds, returned units, restocked units and write-offs per product
- A return policy sets the share of returned units that go back to inventory
- Refunds are subtracted once; write-offs are costed at their unit cost
- Refund review flags products above the refund rate — it never blocks or pauses ads
Why it matters: A product with high returns can look profitable until refunds and write-offs are counted.
Returns
Indirect Expense Allocation
Expenses are allocated by revenue share, unit share or a fixed amount, and shown as a third profit type — fully allocated profit — next to contribution before ads and modeled net profit.
- Software, virtual assistants, prep, photography, insurance and bookkeeping
- Allocated by revenue share, unit share or a fixed amount per product
- A third profit type — fully allocated profit — next to contribution and modeled net profit
- Advertising decisions keep using contribution; overheads stay visible to the owner
Why it matters: Advertising decisions keep using contribution, while the owner still sees what overheads leave.
Indirect expenses & profit types
Modeled P&L by SKU, date and cost period.
Seller revenue, refunds, Amazon fees, COGS, ad spend, other costs and reimbursements, down to a Modeled Net Result — by product, by day and by cost version, each line with its source.
- Product rows and daily rows reconcile to the marketplace totals of the same period
- P&L by cost period shows the units each cost version actually applied to
- Contribution before ads, modeled net profit and fully allocated profit from the same lines
- Modeled results — not GAAP profit, accounting net income or taxable profit
Why it matters: One unprofitable product cannot hide inside a healthy account total.
Modeled profitability
P&L by cost period
- v1Aug 26 – Aug 31 · 16 units at $11.99$191.84
- v2Sep 1 – Sep 24 · 98 units at $12.44$1,219.12
Each cost version is measured on the units it actually applied to; the rows reconcile with the profitability totals.
Break-even ACoS, Break-even CPC and TACoS.
The customer's economics give each campaign a modeled break-even: the ACoS at which modeled profit after ads reaches zero. The desired margin moves a suggested Target ACoS ceiling below it.
- Break-even ACoS = the pre-ad contribution margin of the products a campaign sells, weighted by their ad-attributed sales
- A cost increase or a price cut lowers break-even the day it applies
- TACoS uses one definition everywhere: TACoS = Ad Spend ÷ Seller Gross Revenue × 100. Without seller revenue it is unavailable — never zero.
- Break-even CPC — the most a click can cost before an ad-attributed sale stops covering its contribution — is planned and not yet in the demo
Why it matters: A rising ACoS is judged against what the product can afford.
Product economics
When costs move, advertising thresholds move with them.
A supplier cost change reaches break-even, the campaign's profit state and the automation decision in one deterministic chain — and a person reviews the change before anything scales.
From a supplier cost change to an automation decision
Business-aware guard check
Customer-configured economics
COGS, landed cost, price periods, the return policy and indirect expenses are configured by the customer. Terra PPC combines them with advertising and seller-business context only inside one authorized scope.
What is customer-configured and what is derivedRequest access to Terra PPC.
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