Yes — if you buy product to sell, demo, or give away as part of your direct sales business, tracking that inventory separately from your other expenses matters, because the IRS treats unsold product differently than a regular business expense. When you purchase inventory (starter kits, restocks, demo products), that cost isn't automatically deductible the moment you buy it. Product you've sold by year-end generally counts as cost of goods sold (COGS) and reduces your taxable