Free tool · For DTC brands on Shopify

Inventory Carrying Cost Calculator

The stock sitting in your warehouse isn't free — it quietly costs you money every day it doesn't sell. Enter your own average inventory value and the five carrying-cost components, and this shows the total annual cost of holding that inventory, your carrying-cost rate, and what each dollar of stock costs you to keep.

Your numbers

Each cost below is an annual rate as a percent of your average inventory value — the classic carrying-cost model. Everything updates instantly. Nothing is sent anywhere — this runs entirely in your browser.

Average inventory value (at cost) — the cost value of the stock you hold on an average day across the year (not retail price).

Cost of capital — your required return / opportunity cost of the cash tied up in stock. 10–15% is common for DTC.

%/yr

Storage & handling — warehouse rent or 3PL storage + handling fees, as a % of inventory value.

%/yr

Insurance & taxes — insuring the stock plus any inventory / property tax.

%/yr

Shrinkage & damage — stock lost to theft, breakage, spoilage or miscount.

%/yr

Obsolescence / dead stock — your estimate: stock you eventually mark down or write off because it doesn't sell in time.

%/yr

Annual COGS (optional) — your yearly cost of goods sold. Optional — used only to show inventory turns and carrying cost vs COGS. Enter 0 to skip.

Your carrying cost

Total carrying cost / year

Carrying-cost rate

Cost of capital opportunity cost of cash tied up in stock	$0
Storage & handling warehouse / 3PL storage and handling	$0
Insurance & taxes insuring and taxing the stock	$0
Shrinkage & damage theft, breakage, spoilage, miscount	$0
Obsolescence / dead stock markdowns and write-offs on stock that ages out	$0
= Total annual carrying cost	$0
Per month total ÷ 12	$0
Cost to hold $1 of stock for a year	$0

Read this as a planning estimate, not accounting. It uses the standard carrying-cost model — total carrying cost = average inventory value × (capital + storage + insurance + shrinkage + obsolescence rates), and the carrying-cost rate is simply the sum of those five percentages. Real books split some of these into fixed and variable pieces; treat every figure here as your own estimate — adjust each rate to your actual costs. Typical DTC total rates land around 20–30% a year, but yours depends on your product, storage and turnover.

How to read it

Total carrying cost — the real annual cost of simply owning that stock, before you've sold a single unit. It's pure margin erosion the longer inventory sits.
Carrying-cost rate — the same thing as a percentage. Multiply it by any inventory value to get the yearly holding cost. This is the number to feed into reorder-quantity and safety-stock decisions.
Cost to hold $1 for a year — a gut-check: at a 25% rate, every $1 of stock that sits for a year quietly costs you 25¢. Slow movers and over-ordering are where this hides.

Why carrying cost balloons silently

Carrying cost is worst on the units you didn't mean to be holding — stock you over-ordered, or stock the system thinks you have that isn't actually selling. In practice the inventory counts in Shopify quietly drift from reality: a 3PL or ERP sync half-fails, a bundle decrements the wrong SKU, returns never restock, so you re-buy stock you already have or let dead stock age into a write-off. Nothing errors; the carrying cost just climbs until you notice at stock-take.

How Ops Monitor keeps carrying cost honest

Ops Monitor connects to your Shopify (and 3PL/ERP) with read-only API keys and watches your inventory counts continuously — flagging sync drift, negative or impossible on-hand levels, and stock that's stopped moving — and alerts you by email or Slack the moment the numbers stop matching reality. When your counts are trustworthy, you over-order less, catch dead stock earlier, and the carrying cost you calculated here actually reflects what's on the shelf.

It is read-only: it never writes to your store and never changes stock. It detects and alerts — it does not place orders or manage inventory for you. Catching one over-order or aging dead-stock pile early is usually worth far more than the $149/month price.

See for yourself

Start watching your inventory counts in minutes with read-only keys — $149/month, self-serve, cancel anytime.

Start monitoring — $149/mo →

Not ready? Run the free, no-signup Ops Scorecard to see where your store is most exposed. Or have us hand-check one messy SKU/sync for you with the $29 one-time ops audit.