Inventory holding costs also called carrying costs are the ongoing expenses a business incurs to store unsold goods, covering warehouse fees, insurance, capital tied up in stock, and losses from shrinkage or obsolescence. These costs accumulate silently: the longer inventory sits unsold, the more it erodes the margin on every unit.<\/p>\n
For businesses in the Philippines managing tight working capital, holding costs are one of the fastest ways profit disappears without a clear line item to trace it to. This article explains what inventory holding costs<\/a> are, how to calculate them, and practical strategies for reducing them.<\/p>\n