Inventory costs

Inventory costs consist of interest, space and risk. These costs affect how much inventory Optiply puts down.

What are inventory costs?

Inventory costs are the costs we incur to keep stock. Basically, we look at the cost components that change when the level of inventory changes. These are the following variable costs: 

  • Opportunity costs: which are the returns you could have achieved if you had put the money into marketing, for example. 
  • Space costs: The larger a product, the more space it occupies in the warehouse. 
  • Risk related costs: The chance that a product will never sell out again. 

In general, this percentage does not need to be changed unless 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 extra order leads to extra ordering costs, 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 percentage of stock costs, the less stock will be placed by Optiply.