Carrying Costs

AAA

DEFINITION of 'Carrying Costs'

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Transferred-In Costs

    The money spent on switching the processing of a product or a ...
  2. Holding Costs

    The associated price of storing inventory or assets that remain ...
  3. Carrying Cost Of Inventory

    This is the cost a business incurs over a certain period of time, ...
  4. Inventory

    The raw materials, work-in-process goods and completely finished ...
  5. Inventory Turnover

    A ratio showing how many times a company's inventory is sold ...
  6. Periodic Inventory

    A method of inventory valuation for financial reporting purposes ...
Related Articles
  1. The Working Capital Position
    Investing Basics

    The Working Capital Position

  2. Inventory Valuation For Investors: FIFO ...
    Fundamental Analysis

    Inventory Valuation For Investors: FIFO ...

  3. Analyzing Retail Stocks
    Fundamental Analysis

    Analyzing Retail Stocks

  4. Payback Period
    Investing

    Payback Period

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center