An article in Palats can have several different prices and values depending on its use. It’s easy to get confused about how these prices relate to one another.
.webp?width=300&height=354&name=image%20(4).webp)
In short:
- Want to see what you paid for something when it was new? → Use Purchase price
- Want to see what savings you made through reuse? → Use Equivalent new price
- Want to see what you sold something for on the marketplace? → Use Sales price
- Want to see an estimate of an article’s value? → Use Estimated value
Below is a more detailed explanation of how we think about each price.
Purchase price
The purchase price is simply what your organization paid for the article when you bought it. The price is fixed and is set once per article.
If you choose to leave the purchase price empty, Palats fills in an estimated value representative of an average article in the same category.
Filling in the purchase price can be useful if you want to calculate actual depreciation. This can be derived by calculating: Purchase price − Estimated value
However, for most Palats users, the Equivalent new price is more useful.
Equivalent new price
This value is used in Palats to calculate the savings made through reuse.
To determine the savings, you don’t look at what the specific reused article is worth or was purchased for, but what the alternative would have cost. The question is: If we didn’t already have this article, what would we have bought new instead, and what would it have cost us? That is the Equivalent new price.
Note that the equivalent new price can differ drastically from the purchase price. Take, for example, the classic Swedish "String shelf". When it was launched in the 1940s, a regular String shelf cost €5. But a new equivalent String shelf today might cost around €300.
So when reusing a vintage String shelf, the purchase price is €5, while the equivalent new price is €300!
As a rule, the equivalent new price is always higher than the purchase price for a given model due to inflation.
The equivalent new price is set on the model. If you don’t enter one yourself, Palats will use a standard estimated value specific to the category. To ensure the most accurate reporting of savings, it’s a good idea to enter your own value here, since the standard estimates are often too low.
Sales price
This price is automatically set by the system when an article is sold on the marketplace. It is the price listed on the ad at the time of sale.
Unlike the other prices, you cannot set the sales price yourself. It is also something that is recorded as an event, not as part of the article itself. Therefore, you can only see the sales price in reports containing events such as sales or internal reuse.
Estimated value
This is an optional field you can fill in for an article to assign it an internal valuation. It can be useful, for example, during inventories or when planning a sale.
The goal when setting the estimated value is for it to reflect the market value the product would have if you sold it on the second-hand market.