Overstocking

Excess inventory creates extra overhead, and that costs you money.

Inventory that sits in your garage does not generate sales orprofits; it generates losses that will shrink your bottom line inthe form of:

  • Debt service on loans to purchase the excess inventory.
  • Additional personal property tax on unsold inventory.
  • Increased insurance costs on the greater value of the inventoryin stock.

To avoid accumulating excess inventory, establish a realisticsafety margin and order only what you're sure you can sell.

Excerpted from Starting a Home-based Business

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