I'm trying to figure out how much my items are costing me. The thing is that each time I buy, it changes based on factors like shipping, conversion fees, bulk discounts, etc.
For example, if I buy 50 items at $1 each and $10 shipping, that means I'm paying $60 in total, equating to $1.20 each item. If I sell 40 of them and then want to buy 100 more, it will cost 80c each with $20, resulting in each item costing $1.
When I'm working out my profits, do I treat each "batch" as separate amounts and say that I'm earning 20c more profit on the second batch than the first, or do I continually add the new batches (whether they are cheaper or more expensive) to make a forever-changing average of the costs?
I hope that makes sense. I'm sure this is a normal thing but I don't know what the standard procedure for working this out would be