Distributor Inventory Holding Cost Calculator
Quantify the real monthly financial drain of slow-moving inventory, warehouse rent, working capital bank interest, insurance, and obsolete dead stock.
The Hidden 20% to 28% Cost of Carrying Inventory
Distributors often hold 60 to 90 days of stock without realizing that carrying inventory consumes 20% to 28% of stock value annually :
Cost of Capital (Interest): 10%–13% per year paid on bank CC/OD or equity capital.Storage Space & Utilities: 3%–5% in godown rent, electricity, and security.Damage, Expiry & Pilferage: 2%–4% in unsellable or expired goods.Price Drops & Obsolescence: 3%–6% loss when clearing old batches at heavy discounts.
Formula
Annual Carrying Cost = Average Inventory × Carrying Cost % (Interest + Rent + Damage + Obsolescence)
Frequently Asked Questions
What is considered dead stock in distribution?+ Stock that has not shown any sales movement for more than 90 to 180 days is classified as dead stock and should be liquidated to recover working capital.
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How can distributors reduce holding costs?+ Increase stock turnover frequency from 4 turns/year to 8–10 turns/year by ordering smaller, more frequent replenishment batches from manufacturers.
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📦 Distributor Inventory Holding Cost CalculatorInventory & Capital
Average Inventory Value (₹)
Damage & Dead Stock
Carrying Cost Summary
Total Carrying Cost Rate —
Annual Capital Interest Paid —
Value of Frozen Dead Stock —
Total Annual Inventory Carrying Cost
₹0 / year
Monthly drain: ₹0/month