Electronic Component OEM's:

Here are some of the electronic components' manufacturers we can liquidate for you.

Inventory Carrying Cost
The cost of carrying inventory, even excess or written-off inventory, is usually between 25% to 35% of the original purchase price of the inventory! The carrying cost of inventory is the cost of maintaining your average inventory investment of inventory in your warehouse, storeroom, stockroom, or other location where you stock raw materials or finished goods. What costs do you incur in carrying inventory?
· Handling Cost: This includes the labor of putting away stock receipts and moving material within the warehouse. How much of your employees' time is spent in these activities?
· Rent and utilities for the portion of your warehouse used to store stock inventory.
· Insurance and taxes on inventory. If it's in your warehouse, you have to insure it, and it may be subject to tax.
· Physical inventory and cycle counting. The more material in your warehouse, the longer it takes to count.
· Inventory shrinkage and obsolescence. The more material in your warehouse, the higher the possibility of shrinkage and obsolescence. After all, it's hard to steal something that isn't there!
· Opportunity cost of the money invested in inventory. How much could you make if you were to take the money you're investing in inventory and invest it in a more traditional investment (such as treasury bills)? Or if you are financing your inventory, how much interest are you currently paying the bank?
The carrying cost percentage is calculated by dividing the sum of these expenses (along with the opportunity cost) by the average inventory value. Interested in calculating YOUR company's inventory carrying cost? Here are some questions to guide you:

Overall Inventory Value:
· What was your average inventory value over the past 12 months (sum of month-ending inventory values divided by 12)?

Surplus Inventory Value:
· What is your original book value of your surplus electronic component inventory?

Handling Labor:
· What was your total warehouse labor expense (wages, taxes, and benefits) during the past 12 months (including the expense of inspection, putting away stock, moving from bin to bin as necessary, assembling kits, and filling customer orders)?
· What percentage of warehouse activity is dedicated to filling customer orders and transfers?
· If additional labor was necessary to conduct physical counts of your inventory, what was the cost of this labor (including taxes and benefits)?

Warehousing/Storage Costs:
· Is this warehouse owned or rented?
· If the warehouse is rented, what is the monthly rent?
· If the warehouse is owned, what is the rental cost of comparable warehouse space under a "triple net" lease (i.e. a lease where the tenant pays all utilities, maintenance, and property taxes)?
· How many square feet (or meters) is your facility?
· How many square feet (or meters) is your warehouse?
· What were the total warehouse utilities you paid last year?
· What were the total property taxes you paid last year?
· What was your total warehouse maintenance expense last year?
· What was your total warehouse supply expense, excluding shipping materials (that is, storage boxes and other supplies used in the process of receiving and stocking material)?

Handling Equipment Costs:
· What was the cost of warehouse equipment that was expensed (i.e. not capitalized) last year?
· What was your total depreciation expense for warehouse equipment last year?

Shrinkage and Obsolescence:
· What was the value of written-off inventory last year?
· What was the value of inventory shrinkage last year (not included in the written-off inventory value)?
· How much current inventory is in excess of a 12-month supply (a value equal to monthly demand x 12)?

Insurance:
· What was the cost of insuring your warehouse and equipment last year?
· What was the cost of insuring your inventory last year?

Taxes:
· What was the cost of any inventory taxes you paid last year?

Cost of Money:
· If you borrow money to finance your inventory, what was the average outstanding balance over the past 12 months?
· What is the annual interest rate?
· If you finance your own inventory purchases, what interest rate could you expect to receive if you invested that money in a relatively safe income-producing investment?