In general, retailers prefer to sell out than have stock inventory, because no business owner likes to see old products piling up and occupying the space for new stock. On the other hand, you want your inventory to match consumer demand so that you make as much revenue as possible, without having to mark down prices.
It is not easy to figure out how much inventory is enough for your small business and there is no magic formula for figuring out either, but there are calculations and best practices you can follow.
Holding inventory is a big expense – sometimes too big for small businesses, especially in the case of inventory with special requirements, such as particular storage conditions or climate control. So, you might need to make a strategy against your products’ shelf life.
Thus, the answer to the question: “How much inventory should my small business have?” is simple: enough, but not too much! In other words, you must have enough inventory to cover the demand coming from your customers, but not too much, so that the cost of the inventory does not make the financial situation of your small business more difficult. Shopping with a local wholesale like https://creagermerc.com/ gives you the opportunity to not have to stock up much inventory and still get great pricing.