What are inventory costs?
Inventory costs are the costs incurred for keeping stock. We look at the cost components that change when the level of inventory changes. These are the following variable costs:
Opportunity costs: these are the returns you could have achieved if you had invested money into marketing, for example.
Space costs: The more extensive a product, the more space it occupies in the warehouse.
Risk-related costs: The chance that a product will never sell out again.
This percentage only needs to be changed if one of the above factors is significantly different.
We use the costs to make a trade-off between placing an extra order or placing an advance order when you are in danger of running out of stock. An additional order leads to extra ordering costs and an advance order for extra stock costs.
How does my percentage of stock costs affect Optiply?
An average webshop has a percentage of stock costs of 20%. This means that an interest rate of 20% is charged on the stock. The higher the set ratio of stock costs, the less inventory will be placed by Optiply.