Lara GuevaraSupply Chain expert (Product and Service)

Actual Cost Behind Your Stock

3 Mar 2026 · 1 min

Watch on YouTube

1:08

In this concise advisory video, the speaker critiques the common belief that holding a large amount of inventory—specifically eight months’ worth—is a sign of smart, prepared business management. She explains that such excess stock incurs continuous storage fees, ties up cash that could be used elsewhere, and exposes the business to risk from shifting trends and seasonal demand changes. The core argument is that inventory should be turned quickly to keep cash flowing, not hoarded in warehouses. The speaker offers a concrete action step: examine the "months of stock" metric for the top five SKUs and ensure none exceed three months, thereby uncovering hidden cash and improving inventory velocity. The overall message is a call to shift focus from quantity of stock to speed of turnover.

Chapters

She was proud of 8 months of stock. Here's what it actually cost her. She thought she was being smart, prepared, and safe, but 8 months of stock doesn't mean security. It means 8 months until your cash comes back. Let me break this down. 8 months of stock means 8 months of storage fees you're paying every single month. 8 months of risk. Trends change. Seasonal gifts. Seasons shift, customers move on. 8 months of cash that can't do anything else for your business. She wasn't smart. She was hoarding cash in cardboard boxes, and when she needed money to launch a new product, she couldn't because it was all sitting on pallets in a warehouse in New Jersey. The goal was never have more inventory. The goal is to have faster inventory, less stock turning quicker, cash cycling back to you. So do this: check your months of stock for your top 5 SKUs. If any of them are over 3 months, that's where your cash is hiding. The goal isn't more inventory, it's faster inventory. So save this.