Why Carrying Too Much Stock Is Bad Business

Why Carrying Too Much Stock Is Bad Business

For some, carrying too much stock may seem like a good problem to have. Even though stock represents the potential for future profits, carrying too much stock will cause your business to incur some serious, costly and unnecessary expenses.

For one, carrying too much stock forces you to take up valuable storage space, and that storage space isn’t free. Not only do you have to pay for the space itself, you probably also have to pay employees to maintain it. Overstocking also ties up cash that could be used for growing your business, and when stock goes out of date or damaged (as will often be the case with a wide range of products) it becomes worthless. At the end of the day, carrying too much stock is just not good business.

Unfortunately, managing your stock levels is a full-time job. In an owner-managed business, this task is often times overwhelming. In some cases, even if you do have someone assigned to manage your stock levels, they may not always do their job correctly, causing more problems than they solve. Combine this with the constant pressure from sales staff to start stocking “the next great thing” and stock levels can quickly spiral out of control.

If your business is suffering from carrying too much stock, it’s time to take action. We know you’re up to your neck in the day-to-day business, but inaction is the enemy, your stock “person” should be doing their thing. If you can get to it great, if you can’t and it’s wrecking your head then we’re here to sort it out for you.

Fergus Doyle

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