far beyond just the purchase price. Inventory carrying costs can quietly add up, impacting profitability over time. INCLUDED IN THE INVENTORY CARRYING COSTS ARE: • The cost of the capital • The inventory service cost • The inventory risk cost • The storage space cost The capital costs are made up of the money invested in the inventory and the interest added. The risk cost of inventory is the shrinkage of inventory, theft, administrative errors, and, most importantly in this case, value depletion. Storage space cost encompasses the rent paid for your warehouse space,
instant obsolescence in favour of more profitable components. While in some cases obsolete stock may increase in value, it is risky to keep it. It would be a gamble to hold the stock, hoping for a shortage to boost the price, which is rarely the case. It is also likely that newer designs may replace the parts altogether, meaning these parts never regain any value. INVENTORY CARRYING COSTS The cost of holding onto stock goes As time goes on the parts may reach end of life (EOL) or become obsolete, or – if demand is low enough – even face instant obsolescence in favour of more profitable components.
Helping You Unlock the Value of Your Surplus Inventory
Variety of selling options, offering cash purchase or consignment choices.
International network and global reach, finding an appropriate buyer for your surplus stock.
Tailored services to meet your business and warehouse needs.
Cyclops Group is an established industry leader in the sourcing, management and delivery of obsolete and hard-to-find electronic components.
+44 (0)1904 415 415 info@cyclopsxs.com www.cyclopsxs.com
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THE HIDDEN COST OF KEEPING EXCESS STOCK
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