Seasonal Price Books, Preseason Programs and Dating Terms

In marine, powersports, agriculture, snow and lawn equipment, the price file does not arrive when costs change. It arrives once a year, months before the selling season, attached to an order deadline. Buy inside the window and you get a lower price, longer terms and sometimes free freight; buy after it and you pay book. That structure makes one SKU cost two different numbers in the same twelve months, which breaks almost every assumption built into a single cost-per-item field.

What is actually in a preseason program

Programs vary by industry and by supplier, but they are assembled from the same four components, and the mistake most stores make is valuing only the first one.

• An early-order discount. A percentage off book for committing before a cutoff date. The visible part.
• Dating. Goods ship in the autumn; the invoice is not due until spring. This is a loan, and it has a dollar value you can compute.
• Freight terms. Prepaid freight above some order size, often only inside the program window. In-season fill-in orders are usually small and pay freight.
• Price protection. A stated period during which the book price holds, sometimes with a clause that a later reduction is credited back. This is the part worth reading twice, because its absence is what turns a preseason commitment into a bet.

Each is a real cash effect and belongs in the same number. Comparing "6% off" against a full-price in-season order ignores three quarters of what you were offered.

Putting one number on the offer

Take a unit at book $148.00. The program is 6% off with invoices dated to a spring due date roughly 150 days after shipment, freight prepaid at the program minimum. In-season, the same unit is $148.00 net 30 and small orders carry about $3.20 per unit of inbound freight.

The dating figure is 139.12 × 0.10 × 150 / 365 = $5.72. Use your own cost of money: a line of credit rate if you borrow, the rate on the cash if you do not. Ten percent is a placeholder, not a recommendation — but leaving it at zero is a decision too, and it is wrong for anyone who has ever paid interest.

At a $229.00 retail, the two costs produce noticeably different lines. Preseason at $139.12 is a 39.2% margin. In-season at $151.20 is 34.0%. The effective cost of $133.40, if you credit yourself the financing benefit, is 41.7%. Same product, same shelf, same customer.

How deep to buy: the breakeven sell-through

The real question is never "is the program worth it" — it is "how many units". There is a clean way to frame it. Buying one more unit preseason saves S if it sells, and costs L if it does not. So the marginal unit is worth buying when:

P(sells in season) ≥ L / (L + S)

Here S is $17.80 — what you save against filling in at book plus freight. L depends on what a leftover unit actually costs you, and this is where two lines that look identical in the price book diverge completely.

Case one — a carry-over line. A staple that will still be current next season: filters, belts, oil, standard hardware. A leftover unit sits for roughly six months and then sells at full price. The loss is the carrying cost: 139.12 × 0.20 × 0.5 = $13.91 at a 20% annual carrying rate.

13.91 / (13.91 + 17.80) = 43.9%

Case two — a dated line. Current-model-year goods, a colourway, anything superseded when the next book lands. The leftover carries for six months and has to be cleared at 20% off retail, giving up $45.80 of revenue. Loss per unit is 45.80 + 13.91 = $59.71.

59.71 / (59.71 + 17.80) = 77.0%

Those two numbers should change how the order gets written. On the staple, a unit you are only 50/50 on is still worth taking — the program is generous relative to the downside, and the worst case is that you own something you were going to buy anyway at a price that has since gone up. On the dated line, a unit you are 70% confident about is a losing bet, and the fact that both lines carry the same headline 6% discount tells you nothing about that.

The cost field problem, in its purest form

By March you own the same SKU at two costs: 100 units bought preseason at $139.12 and 20 fill-in units at $151.20 delivered. Shopify has one cost per variant. Whatever you put there is wrong for part of your stock.

Neither of the single numbers is the truth. Leaving the preseason figure in place overstates the season by 0.9 points; overwriting with the last invoice understates it by 4.4. On a 120-unit line the difference is a few hundred dollars, which nobody chases. Across a catalogue where every seasonal line has this structure, it is the reason the profit report and the bank balance disagree at year end.

The mechanics of choosing between weighted average, last cost and FIFO for that one field — and what each choice does to Shopify's reporting — are worked through in inventory cost methods in Shopify. For seasonal buying the practical answer is usually weighted average, recomputed at each receipt, with the individual purchase costs kept somewhere they can be looked up. The field is a summary; it should not be the only record.

What to record when the book arrives

A seasonal book is a dated document with an expiry, which makes it different from a rolling price file. Five fields per book, kept with the file:

1. Effective date and expiry. The date after which these prices are no longer real.
2. Order cutoff. Usually earlier than the expiry and the one that actually binds you.
3. Program terms: discount percentage, dating, freight minimum, any tiered levels.
4. Price protection language. Does the book price hold through the season, and is a later reduction credited?
5. The post-program price for the same lines — because that is the number your reorders will pay.

That last one deserves emphasis. If you set retail off the preseason cost and then fill in at book plus freight, the fill-in units earn a margin you never approved. The safer default is to set retail against the in-season cost and treat the preseason discount as a margin gain on the units you committed to, not as a licence to price lower. The alternative — pricing off the cheapest cost you will pay all year — is how a line ends up under its floor in the middle of the season, at exactly the point when volume is highest.

Where the year-over-year comparison goes wrong

Seasonal categories are the hardest place to answer "did this get more expensive", because you are usually comparing the wrong pairs. Three specific traps:

• Program price against book price. Last year's preseason $139.12 against this year's book $158.00 looks like a 13.6% increase. Against this year's program price at the same 6%, $148.52, it is 6.8%. Compare like with like or the number is theatre.
• A changed program. A supplier who moves from 6% and 150-day dating to 8% and net 30 has raised your cost while appearing to raise the discount. On our unit: 8% off $158.00 is $145.36 with no financing benefit, against 6% off $158.00 at $148.52 less $6.10 of dating value, or $142.42. The bigger discount is $2.94 worse.
• A changed model. Model-year goods rarely survive as the same SKU, so the diff finds a new line and a missing one rather than a price change. Detecting that requires a matching step that handles supersessions and unmatched lines deliberately, not a spreadsheet lookup that silently returns nothing.

The dating value in the second bullet is 148.52 × 0.10 × 150 / 365 = $6.10. It is worth working an example like this once, in writing, before the order meeting — a supplier changing program structure is one of the more common quiet increases, and it is defensible to raise it precisely because you can show the arithmetic.

A calendar, not a review

The reason seasonal categories drift is that the decisions are separated by months from their consequences. A rough annual shape helps:

1. When the book lands — record the five fields, compute effective costs for both buying routes, and re-run margin at current retail on every line in the book. Some lines will already be below floor before you have ordered anything.
2. Before the cutoff — classify each line carry-over or dated, set the breakeven sell-through, and size against last season's actual units rather than the number that feels right.
3. Mid-season — check sell-through against the plan while fill-in is still possible at book, and recompute margin on the fill-in cost rather than the program cost.
4. End of season — record what was left over per line. That number is the input to next year's breakeven, and it is the one nobody writes down.

The last step is the one that turns this from arithmetic into a system. A carrying rate and a leftover estimate are guesses in year one; by year three they are your own measured history, and the buy sizes stop being an argument. What makes that possible is unglamorous: keeping every price book with its dates, and keeping what you actually paid per receipt rather than only the latest figure in one field. Everything else in this article is a calculation you can do in ten minutes — but only if the numbers survived the year.