We drop-ship and bring product in as some of our Suppliers don't drop ship. It's our understanding that any products we bring in, should be classified as Cost of Goods Sold and keep an inventory. Any Suppliers we use that drop ship can be classified as an expense. Is this correct?
We are under 1 million in revenue for the year. We've also read if you're under 1 million, you don't need to keep an inventory regardless of whether you're drop-shipping or bring the product in first. Is this true?
If we do need to keep COGS separate from our drop-ship suppliers, it's our understanding that COGS is for all items purchased in 2017 regardless if they were paid for in 2017. Whereas drop-ship expense is for all items paid in 2017. Is this correct?
