Employ a Detailed Approach to Merchandise Analysis
Ensure profitability from the top down
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George Mollo
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Besides the risk of the item not performing, if you apply a carrying cost, it’ll show the profit impact due to warehouse costs, storage space or perhaps interest on borrowed money.
With interest rates currently hovering in the high single digits, applying, say, an 8 percent cost-of-money factor for carrying the inventory can shed a different light on the decision to buy excess inventory up front.
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George Mollo
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