Storage Days Cost Calculator

Physical storage is the smallest part.

Physical storage is the smallest part. Physical storage is usually a minority of the true carrying cost, capital tied up and obsolescence are the rest.

Written and maintained by Mohit PatelLast checked August 4, 2026How we build these

Currency

Unit cost

Units held

Storage per unit per month

Cost of capital

Annual obsolescence

Days held

Cost of holding this stock

$103,826

$577 a day

Physical storage$49,737

Cost of capital$36,059

Obsolescence$18,030

As share of stock value17%

Physical storage is only 47.9% of the true carrying cost, capital and obsolescence are the rest. That is why negotiating a storage rate saves far less than shipping less often in smaller quantities.

How the Storage Days Cost Calculator works

Physical storage is usually a minority of the true carrying cost, capital tied up and obsolescence are the rest. That is why negotiating a storage rate saves far less than shipping less often in smaller quantities.

Also known as: cost of holding stock per day · daily storage charge · days in storage cost

Turning days on the shelf into money

Storage cost per unit per day, times days held, gives the storage embedded in each unit. It is a simple calculation and almost nobody does it, because storage is invoiced monthly in aggregate and days held sits in a different system.

Getting the daily rate is the first step: total storage cost divided by total units held divided by 30. Getting days held is the second: inventory divided by daily sales rate, per SKU, which is the same arithmetic as days of cover.

Multiply and the result is frequently uncomfortable. A unit costing 2p a day to store and sitting for 200 days carries £4 of storage, which on a £15 item with £6 of margin is two thirds of the contribution gone before anything else is counted.

The costs that scale with time, and the ones that do not

Storage is only one of the time-based costs. Capital tied up in the stock has a cost, whether that is interest on a facility or the return foregone on cash. Insurance is charged on stock value. Obsolescence risk rises with every day held, sharply in fashion and electronics.

Shrinkage accumulates too. Goods held longer are handled more, moved more, and are more likely to be damaged, miscounted or lost. Most operations run a shrinkage rate somewhere between 0.5% and 2% annually and it applies pro rata to holding time.

Total carrying cost is conventionally put at 20% to 30% of inventory value per year once all of these are counted, and storage is often the smallest component. Which is worth knowing, because the argument for holding less is usually made on storage alone and is much stronger than that.

Where the long tail sits

Sort the catalogue by days held and the distribution is nearly always long-tailed: most units move quickly and a minority sit for a year or more. That minority is where the storage cost concentrates.

The trap is that slow lines often look profitable on gross margin, because the margin is calculated per unit sold without reference to how long the unit waited. Adding the storage cost of the waiting period frequently turns a 45% gross margin into a 15% net one.

Which is the case for a periodic review by days held rather than by margin or by revenue. The report is easy to produce and the conclusions are usually actionable: stop reordering these, discount those, and free the space.

What a markdown is actually competing against

The decision to discount slow stock is usually framed as accepting a loss. It is better framed as comparing two costs: the margin given up by discounting now, against the storage and carrying cost of holding until it sells at full price, plus the risk that it never does.

Run it. A unit with £8 of margin costing 3p a day to hold, expected to sit another 300 days at full price, will accumulate £9 of storage in the meantime. Discounting by £4 to move it this month is straightforwardly the better outcome, and it looks like a loss on the sale line.

This is why storage cost per day belongs in the markdown conversation. Without it, the discussion is between a visible loss and an invisible one, and the visible one always loses.

Amazon's aged inventory surcharges

FBA charges long-term storage on inventory held beyond a threshold, and the rates escalate with age. The intent is explicitly to prevent sellers using fulfilment centres as warehouses, and the charges are set high enough to achieve it.

The failure mode is predictable: stock ages quietly, the surcharge appears on a monthly settlement, and by the time anyone notices, several months of fees have accumulated on goods that were not going to sell anyway. Fees exceeding the value of the stock are not unusual.

The protection is a scheduled review rather than a reactive one. Pull the aged inventory report monthly, set a days-of-cover threshold that triggers action, and act: discount, run ads, or remove and liquidate. Removal costs a fee per unit and is frequently the cheapest option available once the stock has genuinely stopped moving.

Where to go next

The Storage Days Cost question rarely arrives on its own. These are the ones that usually come with it:

Storage Cost per Unit Calculator — Paid on time held, so cover is everything.
Inventory Carrying Cost Calculator — The annual cost of holding stock, itemised.
Warehouse Rent per SKU Calculator — Dead SKUs cost space and capital at once.
Etsy Fee Calculator — Every Etsy fee on one sale, itemised.

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 is inventory carrying cost?

Physical storage plus the cost of the capital tied up plus obsolescence and shrinkage. It commonly totals 20% to 30% of stock value a year.

Why include the cost of capital?

Because money in stock cannot be used for anything else. At a 12% cost of capital, £200,000 of stock costs £24,000 a year before a single storage invoice.