Inventory Carrying Cost Calculator
The annual cost of holding stock, itemised.
Annual carrying cost
$15,000
25.0% of inventory value
Per month that is $1,250. A bulk discount has to beat this to be worth taking.
How the Inventory Carrying Cost Calculator works
Holding stock is not free, and most sellers only count the warehouse rent. Capital tied up, insurance, shrinkage, obsolescence and handling all belong in the figure, which typically totals 20-30% of inventory value a year — a number that changes how attractive a bulk discount looks.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
What goes into carrying cost?
Storage space, the opportunity cost of capital tied up in stock, insurance and tax, shrinkage from damage and theft, obsolescence for anything with a shelf life or fashion cycle, and the handling labour stock consumes while it sits.
What is a typical carrying cost percentage?
20-30% of inventory value annually for most businesses. Higher for perishables, fashion and technology where obsolescence is rapid; lower for stable, compact, non-perishable goods.
Why does capital cost belong in it?
Because money in stock cannot be spent on anything else. Whether you value that at your borrowing rate or at what the cash could earn elsewhere, it is a genuine cost — and for most small businesses it is the largest single component.
How does carrying cost affect order size?
It is one of the two inputs to EOQ, and it is why bulk discounts are not automatically good. A 10% discount on a year's stock is worth little if holding it costs 25% of its value over that year.