What is Holding Cost in Retail? Explained

Holding costs refer to the expenses associated with holding and storing inventory over a specific period. This includes costs such as warehousing, insurance, security, and other expenses related to maintaining the inventory in a storage facility. Holding costs are a significant consideration for retailers, as they impact the overall cost of goods and can affect profitability. Efficient inventory management strategies aim to minimize holding costs by optimizing stock levels, reducing excess inventory, and improving inventory turnover rates to ensure a balance between supply and demand.