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Guide April 16, 2026 · Guidance Team

• ✓ Before pitching retail, finalize your true COGS with accurate multi-level Bills of Materials.
• ✓ Implement full lot traceability for all products, from raw ingredient to retail shelf.
• ✓ Gain real-time visibility into all inventory, including raw materials and finished goods, across all locations.
• ✓ Standardize co-packer production orders and reconcile yields accurately to control costs.

Know Your True Costs: Accurate BOMs and COGS

Before you even think about setting a retail price, you must understand your true Cost of Goods Sold (COGS). This goes beyond just raw material prices. You need to account for packaging, co-packer fees, inbound freight, and even waste factors. Develop a multi-level Bill of Materials (BOM) that details every single component. If you're still estimating, you're guessing your margins. An accurate BOM automatically updates your COGS as ingredient prices change, ensuring every production run's cost is precise. This foundational step dictates your pricing strategy and ultimately, your profitability. Don't get caught underpricing because you didn't factor in that corrugated shortage surcharge.

Master Co-Packer Production Orders and Yield Tracking

Your co-packer is your manufacturing arm; you need to manage them like an extension of your own facility. This means clear, detailed production orders that specify ingredients, quantities, and expected yields. Track every production run against these expectations. What happens when they report a 5% yield loss on a 10,000-case run? You need to reconcile those numbers. Don't just accept their invoice. Monitor finished goods received versus raw materials consumed. This oversight ensures you're paying for actual output, not just estimated production. Guidance allows you to issue production orders and reconcile actual yields, making co-packer management transparent.

Track Inventory Across All Warehouses and Co-Packers

You can't sell what you don't have, and you can't ship what you can't find. You need real-time visibility into your inventory levels across all locations: your own warehouse, any 3PLs, and especially at your co-packers. This includes both raw materials and finished goods. Stockouts are expensive and can lead to retail penalties. Conversely, excess inventory ties up cash and risks spoilage. Implement a system that tracks every lot, every pallet, and every case. Knowing exactly what you have on hand prevents missed sales and helps you plan future production efficiently. This isn't optional for reliable retail fulfillment.

Implement End-to-End Lot Traceability for Compliance

Food safety is non-negotiable. You must be able to trace every finished good lot back to its raw material suppliers and forward to its retail destination. This is critical for recalls and increasingly for regulatory compliance like FSMA 204. For organic brands, you also need to track organic mass balance, ensuring certified organic ingredients are properly accounted for throughout production. This isn't just about avoiding fines; it's about protecting your brand's reputation and consumer trust. With a system like Guidance, you can connect critical tracking events and key data elements from supplier to shelf, making mock recalls a five-minute exercise, not a frantic all-nighter.

Optimize Ingredient Purchasing and Landed Cost Calculations

Your purchasing process directly impacts your COGS and ability to produce. Issue formal Purchase Orders (POs) for all ingredients and track their status. If you're sourcing internationally, calculating true landed costs is crucial. This means factoring in freight, duties, customs fees, and any other surcharges on top of the raw material cost. Many brands miss these hidden costs, leading to inaccurate COGS. Without accurate landed costs, your BOM is flawed, and your profit margins are an illusion. Get this right from the start to ensure your ingredient costs are fully transparent and accounted for.

Plan Your Shipping Logistics and Order Fulfillment

Once the product is made, you need to get it to the retailer. This involves understanding their specific shipping requirements: pallet configurations, labeling, delivery windows, and preferred carriers. Each retailer is different, and non-compliance can result in chargebacks. You'll need freight carriers, clear routing guides, and a system to manage outbound shipments. Consider your lead times and buffer stock to ensure you can meet retailer demand consistently. A robust logistics plan ensures your products arrive on time and in full, building a strong relationship with your new retail partner.

See How Guidance Handles This

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