Inventory Management: The New Math

Business decisions at the product level rely upon achieving and delivering an accurate view of the product's true performance. The profit analysis decision should factor in an allocation of advertising expense to determine the viability of the product.

Drop-ship products are attractive to both catalog and e-commerce merchants, as they can be sold with lower operating expense and are free of the challenges associated with physical inventory like back orders, overstocks and inventory turnover. The costs associated with those challenges already are reflected in the cost of goods paid to the drop-ship vendor.