How much money tied up in inventory?

[slapped]

Originally Posted by UnderBites08

Im about to place a order for about 5k In inventory that cost around 5-15$ a pc. I was going to use my own cash, but then got thinking why not use a business loan? Which then made me wonder what the good guys have a month In inventory. And if that is his profits, he should brag that is a good accomplishment. Bragging rights well deserved.

After reading this, I'll give you my 2 cents,,,NEVER Borrow money unles you MUST,,,having the ability to borrow in this day and age is an ENORMOUS asset, the very last thing you want to do is jeopardize that,,

Besides Why pay the Interest?,,,Why don't you just borrow the money from yourself, and pay yourself interest?,,,Keeping your profits as high as possible,,,EVERY Penny counts!,,,This way you can save your borrowing power to EXPAND your Business,,when all of your money is Tied up

Just my Opinion,,,

[GreenBean]

Originally Posted by UnderBites08

Im about to place a order for about 5k In inventory that cost around 5-15$ a pc. I was going to use my own cash, but then got thinking why not use a business loan? Which then made me wonder what the good guys have a month In inventory. And if that is his profits, he should brag that is a good accomplishment. Bragging rights well deserved.

Rubbish. Bragging rights always go off the topic.

Green eyes of jealousy come to play.

Borrowing to do business and what's in inventory are two different subjects.

We start to crossover as regards privacy AND common sense.

[LoopHole]

My inventory is worth about $1. Hopefully will be 100k in profit next week.

[unkown5454]

If you want proper advice on the original topic, please pay attention to those who are experienced and actually making sense like Sandy D, slapped, and GB. The rest of these responses are baseless nonsense and arrogance. If you are still confused, LoopHole gave a perfect example...

[UnderBites08]

The OP question still can be answered.

Simple ? was how much $ in inventory do you big guys keep?

I didn't ask what product once. If it so happens you keep 4 things in stock that are 100,000 each so be it. You have 400,000 in stock regardless if it is mouthwash or Corvettes

Heres "My Story"

With my family business we have a 300,000 in parts at all times. When it sells we restock the next day or so. We just recently took a loan out for 100,000 in more inventory. I guess I just got nosey with what others keep in stock for ebay, as i am trying to make some of my own money on the side, as I'm sick of the 66 hours a week at the store but having to split the money with family all the time.....thats my story

I guess I am just nervous to dump 3,000 to 5,000 In inventory then have it be stuck in pay pals. (Im tight with my own cash)

Some good advice given by some posts though thanks.

[UnderBites08]

Originally Posted by slapped

This is a Question that CANNOT be anwsered Properly,,,

If you sell 55" 3d LED TV's, if you simply want to keep ONLY 10 is Stock you are going to Need $10,000

If you sell Iphone Screene Protectors you can stock 10,000 PCS for $1000,,,,

See my Point,,,,,,A simple formula would be something like:

Cost of the item you want to sell X the Number of those items you Expect to sell in a day X The Number of Days that it will take you to Recieve a new Shipment from the Manufacturer + The Number of Days that you feel comfortable with holding as a "Reserve" or "Cusion"

If you use that formula you can at least get a fairly useful "BallPark" Figure that applies to your Product

This is a great post for any business venture I must add.

[Thankful]

Originally Posted by jbluntz

Bout a $1,000, total profit next month $50k

Compound interest springs to mind :rolleyes

Perhaps you meant 5k?

[jeffweico]

Borrowing to buy inventory is very common in retail, but must be approached VERY carefully. Even brick & mortar stores get it wrong.

First, you need to know how many of an item you can expect to sell. That comes with experience and can be different for every venue. How much profit is there on each item? Then you need to calculate the interest expected to be paid to carry the merchandise. Finally, what would you have to cut the price to in order to move the merchandise quickly if you cannot sell it at your expected price?

What if only half as many sell at the expected price? What if that drops to 20%? At what price point does your profit turn into a loss? What if they just didn't sell and you had to move it by turing it over to a liquidator?

Even people with years of experience get this wrong. For someone new to the business, it could prove fatal.

I sell a lot of books. The profit margins can be very large, but I may hold a book for a year or two before I can sell it. I never borrow, because then there is the pressure to move the merchandise to make loan payments. And I HATE cutting my prices just to generate immediate cash. By not borrowing, it allows me the freedom to hold out for the price I want.

Also, you may find it difficult to get loans from a bank as you are new. An established business with a track record has a much better chance of securing a loan at a reasonable interest rate. A lot of newbies go into business full-blast thinking they will make a fortune, but end up turning their good credit into bad credit very quickly.

Proceed with caution.

[rsot]

Work it out.

[richardb123]

Hello,

My view on this all depends on your restocking times and if you have a shop/customers sometimes collect

thats if your selling new items with mulitiple quantities
If you in to used car parts for example you might want to have atleast 2 of a certain type of engine or wing mirror

It always pays to have things instock imo so one of everything you plan to sell would be a good start

If your on next day restocking or 3 month restocking this will alter the quanitities of course
Plus its good to have another incase of warrantly claims or lost in post etc

Also we could go down the how many do I need to buy to get a good price from the supplier of each item

like people have said there is no good answer but its interesting to know,

where do you draw the line, I guess most are trying to sustain a good income

[newjerseymax]

Inventory varies on so many factors. Everything from sales to weather...

As A side note I have learned to always keep a minimal amount of identical product in stock in case of DOA or post office mishaps. A customer is much more likely to be satisfied with a replacement then a refund. That is my experience anyways...

Also, I agree with Sandy (as usual) that it also varies on the deal at the moment. I dont look for products they find me. Summer time I find great deals for holiday sales. If you have the know how and capital then it works. Not a good strategy with a load though.