5 Ways in which Dead Stock drains your business resources
The cost of holding goods in stock is called the carrying cost, this is usually expressed as a percentage of the inventory value. It consists of various components like capital, warehousing, depreciation, insurance, taxation, obsolescence and shrinkage costs. The biggest contributor of the total inventory cost is this carrying cost or holding cost. Carrying costs should ideally be between 20-30% of your inventory value, no more.