Inventory Management

Every unit sitting in your warehouse is costing you money, even when nobody is buying it. Rent, insurance, the cash tied up in stock that could be earning elsewhere, and the slow drift of products toward obsolescence all add up to one number that most online sellers never calculate: inventory carrying cost. Industry estimates put it at roughly 20% to 30% of your average inventory value per year, which means a seller holding $100,000 of stock can quietly bleed $20,000 to $30,000 a year just to keep it on the shelf. This guide explains exactly what inventory carrying cost is, breaks down the formula with a worked example, shows what a healthy percentage looks like, and gives you practical ways to bring it down.

If you have ever seen a product on a shop shelf that the shop did not actually pay for until it sold, you have seen consignment inventory at work. The supplier still owns those goods. The shop is simply holding and selling them, and money only changes hands once a customer buys. It is one of the oldest arrangements in retail, and it has quietly moved online, shaping how some marketplaces, boutiques and dropship-adjacent models operate today. This guide explains exactly what consignment inventory is, who the two parties are, how the process and the accounting work, where it helps and where it bites, and how to keep the stock counts honest when consigned goods are sold across several channels at once.

Days Inventory Outstanding (DIO) is the single cleanest answer to one of the hardest questions in ecommerce: how long is my cash trapped in stock before it turns back into revenue? It is a finance metric, not an operations one — your accountant, your bank, and your investors all read it — but the levers that move it sit firmly inside the warehouse and the listing platform. For a multichannel seller juggling Shopee FBS, Lazada FBL, Amazon FBA and a Shopify 3PL, DIO is also the single most underused metric for spotting which channel is quietly bleeding working capital.