Travel Hosting Business by The Staff of Entrepreneur Media

Author:The Staff of Entrepreneur Media
Language: eng
Format: epub
ISBN: 9781613083680
Publisher: Entrepreneur Press
Published: 2017-06-19T04:00:00+00:00

When you find yourself with excess inventory, your natural reaction will probably be to reduce the price and sell it quickly. Although this solves the overstocking problem, it also reduces your return on investment. All your financial projections assume that you will receive the full price for your goods. If you slash your prices by 15 to 25 percent just to get rid of the excess inventory, you’re losing money you had counted on in your business plan.

Some novice entrepreneurs react to excess inventory by being overly cautious the next time they order stock. However, this puts you at risk of having an inventory shortage. To avoid accumulating excess inventory, set a realistic safety margin and order only what you’re sure you can sell.

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