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Cost Components

Cost components help your team understand what an inventory item is really made of, cost by cost.

Instead of storing only one final purchase price or selling price, Loupe Factory lets you break an item into the materials, services, and charges that contribute to its value. For example, a jewelry item may include gold, gemstones, labor, packaging, freight, duties, service charges, or overhead. Each component has its own quantity, rate, and cost, giving your team a clearer view of item cost, pricing, and margin.

Use cost components when you want pricing decisions to be based on the real inputs behind an item, not only on a final price entered at the end of the workflow.

How Cost Components Fit with Rate Profiles

Cost components and component rate profiles work together.

Record What it stores Where it is used
Component Rate Profile The reusable rate details, such as component name, source, currency, rate basis, rate price, status, and effective time. Managed in the Component Rate Center.
Cost Component The item-specific component quantity, rate behavior, and calculated cost for one inventory item. Added from an inventory item's Cost Components modal.

The rate profile answers: what rate should this component use?

The cost component answers: how much of that component is used in this inventory item?

For example, a Gold 18K (750) rate profile may store the current rate per gram. A finished jewelry item can then link to that rate profile and store the actual grams of Gold 18K used in that item.

Important

A rate profile does not affect inventory by itself. It must be linked to a cost component on an inventory item before it contributes to item costing.

What a Cost Component Can Represent

Cost components can represent the different costs that make up an item.

Component type Example use
Metal Gold, silver, platinum, palladium, or supported base metals used in the item.
Gemstone Diamonds, colored stones, melee, or other stones attached to the item.
Labor Setting, casting, polishing, repair work, inspection, or other labor charges.
Packaging Boxes, pouches, labels, inserts, or presentation materials.
Freight Inbound freight, outbound freight, or item-level shipping allocation.
Duties and fees Import duties, handling fees, compliance charges, or other landed-cost additions.
Service charges Third-party service work, certification, plating, engraving, or finishing.
Overhead Allocated factory, warehouse, administration, or handling overhead.

This structure is useful for global B2B manufacturers and wholesalers because the same item may carry material costs, service costs, landed costs, and handling costs across several teams or locations.

What the Modal Shows

When you open the Cost Components modal, Loupe Factory shows an item summary at the top so you can review the inventory context before adding or changing costs.

The summary can include:

  • product
  • inventory type
  • size
  • weight
  • quantity
  • purchase price
  • selling price

Review this summary before saving components. It helps confirm that you are costing the correct item and using the right weight or piece count.

Add Cost Components to an Inventory Item

To add cost components:

  1. Open the inventory item you want to cost.
  2. Open the Cost Components modal.
  3. Review the item summary at the top, including product, type, size, weight, quantity, purchase price, and selling price.
  4. Click Add Component.
  5. Choose a Component Type, such as metal, gemstone, labor, freight, packaging, or overhead.
  6. Select a Component Rate Profile.
  7. Review the component name, rate basis, source, and rate supplied by the selected profile.
  8. Enter the Component Quantity/Weight used for this item. The unit shown beside the field comes from the selected rate profile.
  9. Use the calculator button if you want Loupe Factory to auto-fill the remaining available weight or quantity for that rate basis.
  10. Choose the Rate Price Behavior, such as manual apply, locked, or live rate. Live rates are available for supported metal components.
  11. Add more components if the item has additional materials, services, or charges.
  12. Review the total component cost and compare it with the item's current purchase price and selling price.
  13. Click Save Components.

Admins can also use Set selling price & Save to save the components and update the item's selling price from the total component cost.

Rate Price Behavior

Rate price behavior controls how the cost component uses the selected profile's rate.

Behavior Use it when
Manual apply You want to apply or confirm the rate manually for this item.
Locked You want the component's rate to stay fixed for this item after it is saved.
Live rate You want a supported metal component to use live Market Feed rate behavior from the linked rate profile.

Use locked rates when a quote, invoice, purchase receipt, or internal approval needs a fixed costing basis. Use live rates when the component should stay tied to supported metal market rates through its linked rate profile.

Automatic Quantity Adjustments

Loupe Factory keeps linked cost component quantities aligned with inventory changes when the component is based on weight or pieces.

When an inventory item's weight or quantity changes, matching cost components adjust proportionally. This can happen through:

  • production
  • order fulfillment
  • returns
  • purchase receiving
  • shipment selection
  • inventory imports
  • inventory edits

For example, if an inventory item is reduced from 100 grams to 75 grams, a linked gold cost component based on grams is reduced by the same ratio. If an item's pieces are reduced, linked piece-based components adjust the same way.

This helps keep item-level costing aligned with actual stock movement instead of leaving old component quantities attached to a smaller or larger inventory item.

Components That Do Not Auto-Adjust

Some costs are not tied directly to item weight or piece count. Loupe Factory does not automatically change these component quantities when inventory weight or quantity changes.

Examples include:

  • labor per hour
  • job-based service charges
  • flat packaging charges
  • flat overhead allocations
  • other time-based, job-based, or flat costs

Review these components manually when the business context changes. For example, a packaging fee may stay the same even if item weight changes, while a labor charge may depend on the actual work completed rather than the item's remaining grams.

Audit Notes for Component Adjustments

When Loupe Factory adjusts cost component quantities because of an inventory change, it records inventory notes for the adjustment.

Those notes include user context, so your team can see who made the related inventory change. This gives finance, operations, and managers a clearer audit trail when cost quantities change after production, receiving, fulfillment, returns, imports, or manual edits.

Pricing and Margin Benefits

Cost components give your team a clearer pricing base.

They help you:

  • see what each item is made of from a cost perspective
  • compare total component cost with purchase price and selling price
  • spot margin pressure before quoting or fulfilling an order
  • update selling price from the item's component cost when an admin chooses Set selling price & Save
  • keep costing aligned as inventory weight or quantity changes
  • separate material costs from labor, freight, packaging, duties, service, and overhead
  • explain price changes with a clearer internal cost trail

For manufacturers and wholesalers, this is especially useful when margins move because of metal rates, supplier costs, production yield, freight allocation, or service work.

For best results:

  1. Create or review the required Component Rate Profiles.
  2. Open the inventory item that needs item-level costing.
  3. Add material components first, such as metals and gemstones.
  4. Add service and charge components, such as labor, freight, packaging, duties, and overhead.
  5. Use locked rates when the cost must remain fixed for a quote, receipt, or approved calculation.
  6. Use live rates only for supported metal components where live market behavior is appropriate.
  7. Review total component cost against purchase price and selling price.
  8. Save the components, or use Set selling price & Save if you are an admin and want to update the item selling price from the component total.

Next Steps