I read PUB 538 which stated a switch to expenses only, vs cogs can be done by submitting form 3115 with my return.
Probably.
If you use cash method and your total average income for the last 3 years was less than $1,000,000 per year, you don't need to use the cost of goods sold section at all.
Instead, you can just write off your merchandise under supplies or miscellaneous expenses when you purchase it. In this case, your merchandise purchase in 2016 would be fully written off then as a business expense. Your 2017 is written off in 2017
With accrual method, you don't record merchandise as an expense when you purchase it and instead it's 'capitalized' as an asset on your balance sheet called Inventory. To answer your question - "can I count that merchandise" - it's a bit more complicated than that, so I can't say yes or no because you have to keep detailed accounting records after every transaction you have.
The balances of your accounts at the end of the year are then used for the cost of goods sold section. You need to have a beginning balance for Inventory (which needs to match your ending balance of last year). Then you report Purchases and the other accounts that you see in the Cost of Goods Sold section in TurboTax.
The amount you write off is based on the differences in these accounts and the type of accrual based inventory accounting method you used. Effectively writing off the actual amount you sold during the year.