I signed on as a Stampin' Up! Demonstrator in 2021. As a direct sales business, I do not have to keep inventory on hand as it is not purchased directly from me. However, I need to keep products on hand to use for demonstrations (card classes, online videos, etc). I am trying to figure out how I categorize my stamp and die set expenses properly. Do I record them as inventory? Are they a capital expense? Materials and supplies expense? I have no intention of ever selling them. They are not consumable. However, they are a necessary business expense in order to sell my products. Therefore, I believe they absolutely fall into the category of COGS, but the "inventory" part is what's confusing me. If I classify and track them as inventory, the only way that they can come off of my books is if the products go end-of-life from the parent company - correct? i.e. a stamp set that was available for sale in 2021, which I purchased was classified as an inventory expense in 2021. Then it went EOL in 2022, so for 2022 tax purposes it will come off of my inventory... am I tracking this logic correctly? Any help/advice/direction would be greatly appreciated.
