Carrying Costs

What are 'Carrying Costs'

Carrying costs refer to the price of holding, or "carrying," inventory. Carrying costs include storage costs, maintenance (particularly in regard to perishable items), insurance and other less tangible expenses, such as opportunity costs and losses due to theft.

BREAKING DOWN 'Carrying Costs'

One of the great advantages enjoyed by many cyber stores is the lack of carrying costs. Instead, many online retailers stock items as needed or have them all shipped from a central location, as opposed to having inventory at multiple brick-and-mortar locales.

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RELATED FAQS
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    Consider how cost affects a product's price. Corporate expenses and the current cost of living both impact the final sticker ... Read Answer >>
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    Understand how economic order quantity minimizes overall inventory costs to maximize profits. Learn what specific types of ... Read Answer >>
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