decisive action. In tight markets, being able to move quickly can be the difference between staying ahead or falling behind. OPPORTUNITY COST The longer you hold onto excess stock, the more you lose in terms of what that money could be doing elsewhere. The opportunity cost is the unseen loss of alternative investments. For example, capital tied up in ageing components could instead be used to purchase in-demand parts, upgrade equipment, fund product development, or take advantage of supplier discounts. Beyond financial investments, there’s also a strategic cost: delayed decisions, missed partnerships, or foregone market opportunities. These losses may not be visible on a balance sheet but can significantly impact long-term growth. CONCLUSION Holding onto excess electronic inventory might seem like a low-risk move, but as shown in this article, it can come with a range of hidden costs, from financial strain to missed opportunities. While selling depreciated stock may feel like admitting defeat, delaying that decision often leads to greater losses. When you consider the cumulative impact on your cash flow, operations, and strategic agility, selling your surplus inventory could save you more than you realise. At Cyclops, we’ve been helping our customers unlock the value of their excess inventory for the past 30 years. Contact us today to learn more about our excess management and selling options.
Storage space cost encompasses the rent
paid for your warehouse space, heating, lighting, transportation, and any other costs for maintaining the physical facilities.
heating, lighting, transportation, and any other costs for maintaining the physical facilities. Handling and maintenance will be variable depending on the volume and type of stock held. WAREHOUSE SPACE AND STOCK MANAGEMENT Aside from financial costs, the physical impact of keeping excess stock can also have a negative effect on your business. If storage space is taken up by unnecessary inventory, it means there is less space available for the stock you actually need. It also means that there is less flexibility when it comes to manoeuvring stock, more time spent rotating inventory, and less space to allocate to production. It will take staff longer to locate the stock they need, and there will be more management overhead when it comes to admin and stock audits. IMPACTED CASH FLOW Free cash flow is crucial for the smooth running of any business. Whether it’s covering unexpected expenses, responding to a sudden spike in demand, or investing in urgent repairs or equipment, having liquid assets available is essential. When capital is tied up in slow moving stock, it reduces your financial flexibility. This can leave your business vulnerable to external pressures or internal demands that require quick,
Author: Dionne Pentland, Manager, Cyclops Excess
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