Excess Inventory: Causes, Costs & How to Manage Overstock
Authored by
Chris Hondl
Last updated: August 8, 2025
Turning Overstock into Opportunity: Managing Excess Inventory
For multichannel retailers, few challenges drain cash flow as quickly as excess inventory sitting idle on shelves. These forgotten products represent frozen capital that could be fueling growth instead of collecting dust.
Throughout this guide, we'll explore the root causes behind inventory buildup, calculate hidden costs, identify early warning signs, and provide prevention tactics to keep stock levels optimal. You'll discover practical strategies to sell excess inventory, reduce carrying costs, and maintain lean operations across all channels, including Amazon FBA bins.
Modern inventory challenges require modern solutions. We'll show how barcode inventory systems and inventory planning software provide the visibility needed to prevent overstock situations. From forecasting techniques to liquidation options, this comprehensive resource will help you transform excess inventory from a liability into an opportunity for recovery.
What Is Excess Inventory? Definitions & Categories
Excess inventory refers to stock quantities that exceed anticipated demand over a specific time period. Unlike obsolete inventory, which has lost its market value due to changes in technology, fashion, or functionality, excess inventory remains viable but simply exists in quantities beyond what can reasonably be sold in the normal sales cycle.
Understanding what is excess inventory is crucial for effective excess inventory management. Excess stock ties up capital, increases storage costs, and risks becoming obsolete if not addressed promptly. Meanwhile, obsolete inventory represents items that are no longer sellable at full price due to market changes, while deadstock (covered in detail on our what is deadstock page) represents inventory that hasn't sold and likely won't sell without intervention.
Most businesses categorize excess inventory based on aging thresholds:
- 90+ days: Early warning stage, requiring monitoring
- 180+ days: Moderate risk, requiring promotional planning
- 365+ days: High risk, requiring aggressive liquidation strategies
For Amazon FBA sellers, excess inventory considerations are even more pressing with long-term storage fees triggering at:
- 181-365 days: Tier 1 storage fees
- 365+ days: Significantly higher Tier 2 storage fees
What happens to excess inventory varies by business strategy. Some companies implement markdown strategies, others explore liquidation channels, and some donate goods for tax benefits. The most effective approach depends on product type, market conditions, and inventory turnover ratio targets.
Proactive excess inventory management requires regular inventory reviews, accurate demand forecasting, and safety stock optimization to prevent accumulation while maintaining service levels.
Why Excess Inventory Happens: Common Root Causes for Multichannel Sellers
Excess inventory rarely appears overnight but accumulates gradually due to several interconnected factors. Understanding these root causes is critical for developing effective excess inventory management strategies.
Demand-Forecasting Blind Spots
Seasonal fluctuations can dramatically skew inventory requirements, yet many businesses rely on basic forecasting that misses these patterns. Marketing campaigns create sudden demand spikes that inventory planners can't predict. For multichannel sellers, cannibalization across platforms presents a unique challenge – when sales surge on Amazon but decline on your website, overall demand appears stable while creating localized excess.
Supplier Constraints
Large minimum order quantity requirements force businesses to purchase more than needed, especially for new products with uncertain demand. Extended lead times compound forecasting difficulties when orders placed today won't arrive for months. Supplier promotions tempting businesses to "stock up" create immediate excess when projected sales don't materialize.
Operational Gaps
Disconnected data systems create information silos between sales channels, warehouses, and purchasing teams. Manual spreadsheet management introduces errors and delayed updates that prevent timely inventory adjustments. Slow transfer processes between FBA, 3PLs, and physical stores mean inventory sits idle in one location while needed in another.
These challenges are significantly amplified without proper inventory planning software. Without integrated systems, what happens to excess inventory becomes predictable: it consumes capital, warehouse space, and eventually requires costly liquidation. Effective excess inventory solutions start with addressing these fundamental root causes.
Hidden Costs of Holding Excess Stock
Excess inventory isn't just a storage problem—it's a significant financial burden that quietly drains resources from your business. Understanding these hidden costs helps prioritize effective inventory management.
Cash Flow Constraints
Capital tied up in unsold inventory creates immediate opportunity costs. Rather than funding growth initiatives like marketing campaigns, new product development, or essential payroll, your money sits idle on warehouse shelves. For smaller businesses, this cash flow restriction can be particularly damaging when trying to compete with larger, more liquid competitors.
Direct Carrying Costs
The physical storage of excess inventory generates tangible expenses that directly impact your bottom line:
- Warehouse space costs, including rent, utilities, and maintenance
- Insurance premiums that increase with inventory value
- Shrinkage through damage, theft, or deterioration
- Amazon FBA long-term storage fees and aged-inventory surcharges that escalate dramatically over time
- Additional labor costs for managing, counting, and relocating overstock
Brand and Margin Erosion
When you eventually resort to inventory turnover ratio improvement through clearance sales, the financial impact extends beyond simple storage costs. Markdowns not only reduce profit margins but can also dilute brand perception when customers become accustomed to purchasing your products at discount prices.
Additionally, outdated or obsolete inventory that remains on shelves too long creates poor customer experiences and damages brand reputation—especially in fashion, technology, or perishable goods sectors.
The longer you wait before addressing excess stock, the deeper the discounts typically required for selling excess inventory. Proactive excess inventory liquidation strategies not only protect profit margins but also support sustainability goals by reducing waste and environmental impact from discarded products.
Early Warning Signs: Diagnosing Overstock Before It Explodes
Preventing excess inventory starts with recognizing the warning signs before your warehouse shelves collapse under the weight of unsold products. Smart merchants establish monitoring systems that catch inventory problems early when they're still manageable.
Critical Metrics to Monitor
Effective excess inventory management begins with tracking these essential indicators:
- Inventory aging buckets: Sort stock by time since receipt (0-30 days, 31-90 days, 91+ days)
- Forward cover days: Calculate how long current stock will last at current sales velocity
- Safety stock percentage: Track which products have quantities significantly above established levels
Dashboard Red Flags
Your inventory management dashboard should highlight these warning indicators:
- Rising FBA stranded inventory units sitting unsellable in Amazon's warehouses
- Stock weeks-of-supply turning "code red" (12+ weeks for seasonal items, 8+ for standard goods)
- Increasing inventory holding cost as a percentage of total inventory value
Set up automated alerts inside your inventory planning software to notify key team members when thresholds are breached. Combining lead time analysis with proper how to manage excess inventory protocols creates a powerful early warning system that identifies potential excess before it consumes your working capital.
Forecasting & Prevention Tactics to Reduce Overstock
Effective forecasting is your first line of defense against excess inventory. Smart businesses look beyond simple averages to implement multi-dimensional forecasting approaches:
Time-Based Velocity Analysis
Analyze your 30/60/90-day velocity averages to identify evolving demand patterns. By comparing these different timeframes, you can spot acceleration or deceleration in product performance. Trend smoothing techniques help filter out seasonal spikes or one-time anomalies that might otherwise lead to overordering.
Channel-specific demand signals provide critical context for accurate forecasts. What sells quickly on your website might move slowly through wholesale channels, requiring separate stocking strategies for each.
Dynamic Inventory Controls
Implement dynamic safety stock rules that adjust automatically based on sales volatility and product importance. Products with inconsistent demand need higher safety thresholds than steady sellers. For a comprehensive approach to these calculations, explore our guide on safety stock.
Supplier negotiations are equally important for preventing overstock. Work toward flexible minimum order quantities (MOQs) that align with your actual demand, not arbitrary supplier preferences. Breaking larger purchase orders into smaller, more frequent deliveries directly supports how to reduce excess inventory while maintaining appropriate stock levels.
Before placing new orders, utilize transfer planning to redistribute inventory from slower-selling locations to high-demand areas. This internal balancing often eliminates the need for additional purchasing while maximizing existing inventory.
For mathematical precision in your ordering process, our reorder point formula guide offers essential calculations to prevent both stockouts and overstock situations.
All these prevention tactics work best when centralized through robust inventory planning software that integrates your sales data, forecasts, and inventory turnover ratio metrics into a cohesive decision-making framework.
Operational Strategies to Trim Existing Excess Inventory
When your business already faces excess inventory challenges, implementing proven reduction strategies can help restore healthy stock levels without sacrificing profitability. Consider these tactical approaches:
Strategic Sales Approaches
A gradual markdown schedule prevents brand erosion while methodically clearing inventory. Rather than slashing prices dramatically, reduce them incrementally over time to maintain perceived value. Strategic bundling pairs slow-moving items with popular products, creating value packages that move excess inventory while preserving margins.
Flash sales create urgency and excitement, particularly effective for seasonal or trending items that need quick movement. For established brands, outlet stores provide a dedicated channel for excess stock without diluting the primary brand experience.
Targeted Marketing Channels
Leveraging influencer partnerships for exclusive promotions can rapidly move aging SKUs to engaged audiences already primed to purchase. Email-list exclusives reward loyal customers with special access to discounted inventory, illustrating effective excess inventory solutions while strengthening customer relationships.
For inventory that's struggling in primary channels, re-labeling or repackaging for secondary markets like wholesale jobbers can recover costs while preserving brand positioning in premium channels. The key to successful inventory optimization software implementation is identifying these alternative channels before inventory ages further.
Internal Redistribution
Internal stock swaps between locations represent a cost-effective how to manage excess inventory strategy. By analyzing location-specific demand patterns through inventory aging reports, businesses can redistribute products to brick-and-mortar stores or event kiosks where local demand is stronger.
These tactical approaches provide practical methods to sell excess inventory and demonstrate how to get rid of excess inventory without sacrificing long-term brand value or profitability.
Disposal & Liquidation Options: Selling Excess Stock Responsibly
When markdown strategies fall short, explore decisive excess inventory liquidation channels. Professional liquidation brokers purchase surplus stock at 10-30% of retail value, providing quick capital recovery when storage costs become prohibitive.
B-stock auction platforms offer another avenue for selling excess inventory to wholesale buyers. These marketplaces connect you directly with excess inventory buyers seeking discounted merchandise for their business models.
Documentation and Preparation Requirements
Before liquidation:
- Prepare detailed manifests with product counts and conditions
- Remove original UPC codes if required by manufacturer agreements
- Perform quality checks to maintain business reputation
- Organize items into standardized pallets for easier handling
Financial recovery varies by product category—electronics might yield 20-30% of retail value, while apparel typically returns just 5-15% through brokered sales.
Charitable donations combine social responsibility with potential tax benefits. Donating to qualified nonprofits can generate goodwill while possibly qualifying for deductions that exceed liquidation returns.
For international liquidation, verify products meet destination country regulations and complete proper export documentation before shipment.
From an environmental perspective, responsibly moving excess inventory prevents eventual landfill disposal, aligning with sustainable business practices and effective inventory turnover ratio management. Implementing just-in-time inventory principles can help prevent future excess inventory situations.
Software-Enabled Excess Inventory Management for SMBs
For small and medium businesses, managing excess inventory through spreadsheets can be like trying to navigate with an outdated map. Purpose-built inventory management software offers significant advantages through specialized features like real-time KPI dashboards, barcode scanning for accurate receiving, and automatic aging reports that flag slow-moving items before they become deadstock.
These systems transform how businesses approach excess inventory in several key ways:
Integration Benefits Modern inventory management platforms connect seamlessly with your existing business ecosystem through open-API integrations. This means your inventory data flows automatically between Amazon, Shopify, QuickBooks, and third-party logistics providers, creating a unified view of your stock positions. This integration eliminates data silos that often lead to overordering and poor visibility.
Prevention Through Automation The best inventory optimization software doesn't just help you manage excess after it occurs—it prevents it through:
- Automated alerts when stock levels exceed predetermined thresholds
- Transfer planning tools to redistribute inventory between locations
- Purchase order optimization that adjusts quantities based on current sales velocity and lead time
Real-World Application Rather than discovering excess stock during quarterly reviews, software-enabled management identifies potential issues weekly or even daily. This compressed timeline dramatically improves your ability to take corrective action before items lose value. For example, seasonal merchandise can be discounted earlier while demand still exists rather than liquidated post-season.
When implemented properly, these systems significantly streamline excess inventory management cycles and provide clear frameworks for reducing overstock—turning what was once a reactive process into a proactive strategy.
How Finale Inventory Helps You Stay Lean & Profitable
For multichannel sellers managing hundreds or thousands of SKUs across multiple locations, inventory balance is critical. Too little stock means lost sales, while too much ties up valuable cash. Finale Inventory offers a streamlined solution to this common challenge.
Powerful Visibility Across All Channels
Finale's cloud platform connects seamlessly with Amazon, Shopify, Walmart, and QuickBooks without requiring complex ERP implementation. This integration provides a comprehensive view of your inventory ecosystem.
"Finale inventory has been a complete game-changer for our business. Before we switched over to Finale, we were keeping track of all of our inventory and purchase orders by hand. It was a nightmare! This software has allowed us to stay organized with our inventory, know exactly when orders need to be placed for each of our brands, keep track of out-of-stock or back-ordered products, place purchase orders, and so much more." – Stephanie Parks, CEO @ DermWarehouse
The central dashboard displays on-hand, inbound, and in-transit quantities across all locations, providing early warnings about potential excess inventory situations before they impact your cash flow. This visibility is crucial for maintaining optimal stock levels throughout your sales channels.
Data-Driven Replenishment Without Guesswork
Finale's replenishment engine leverages proven velocity and moving-average methods to generate right-sized purchase orders and transfer recommendations. Unlike opaque AI systems, Finale's approach is transparent and predictable, giving you confidence in your ordering decisions.
The system's location-balancing workflow is particularly valuable—it identifies opportunities to move surplus from warehouse A to FBA or a 3PL rather than making unnecessary new purchases, saving you significant capital while maintaining service levels.
"It's allowed us to become way better about keeping inventory in stock, made purchasing in time from overseas much easier. It's virtually eliminated shipping errors." – Brett Haney, President @ Microfiber Wholesale
Barcode Precision for Error-Free Operations
Mobile barcode scanning capabilities streamline receiving, cycle counts, and FBA prep processes. This functionality prevents costly mis-counts that often lead to unintended excess inventory or stock-outs. The system maintains inventory accuracy at every touchpoint, from initial receiving to final fulfillment.
Tangible Business Benefits
For growing businesses in the $2M–$200M range, Finale Inventory delivers multiple advantages:
- Free up working capital by preventing over-ordering and implementing strategies to sell excess inventory when needed
- Eliminate spreadsheet chaos, reducing purchase planning from hours to minutes
- Avoid costly Amazon long-term storage fees with timely alerts and precise transfer timing
- Achieve quick ROI with cloud setup measured in weeks, not months
"When you take the time to really set up Finale with all of your product information and reorder points tightly, it makes every day work a breeze!" – Heath C., Inventory Manager
The inventory turnover ratio of your business can dramatically improve with these capabilities, leading to healthier cash flow and more sustainable growth. For businesses experiencing supply chain issues, Finale's forecasting and planning tools provide the visibility needed to adapt quickly.
For a comprehensive look at how Finale fits into your inventory management strategy, explore our complete guide to inventory planning software.
Conclusion
Excess inventory represents more than just unsold products—it's a silent drain on your business resources. From crystal-clear definitions to actionable prevention and disposal tactics, this guide showed why excess inventory drains cash, erodes profit, and harms sustainability goals.
Key takeaways include spotting root causes early, monitoring true carrying costs, setting dynamic safety stock, and leveraging multiple channels to handle or donate responsibly.
Modern tools—especially inventory planning software like Finale—turn data into fast decisions, cutting the time and stress of excess inventory management.
Take action today: audit your stock, identify aging SKUs, map liquidation paths, and adopt software workflows that keep inventory lean while sales soar. With the right approach, excess inventory transforms from a business liability into an opportunity for optimization and renewed profitability.
Frequently Asked Questions
Excess inventory occurs when a business has more stock on hand than needed to meet customer demand within a reasonable timeframe. It represents capital tied up in products that aren't moving efficiently through your supply chain. Unlike safety stock, which provides intentional buffers against demand spikes, excess inventory exceeds optimal levels and hurts profitability. For multichannel sellers, this problem compounds when stock accumulates across multiple locations—your own warehouse, 3PL facilities, and Amazon FBA. Recognizing excess early allows for strategic inventory turnover ratio improvements.
When a company has too much inventory, it's commonly called "excess inventory," "overstock," or "surplus inventory." In more severe cases, it may be labeled as "obsolete inventory" if it's unlikely to sell at full price. Supply chain professionals sometimes use the acronym "SLOB" (Slow-Moving and Obsolete) to describe this situation. For ecommerce businesses selling through multiple channels, excess inventory is particularly problematic as it ties up working capital and incurs storage fees at different facilities, including costly Amazon FBA aged inventory surcharges. Effective inventory planning software can help prevent this situation.
Excess inventory creates multiple business problems. First, it ties up working capital that could fund growth initiatives or marketing campaigns. Second, it incurs ongoing storage costs, including warehouse space, insurance, and especially expensive Amazon FBA long-term storage fees. Third, products risk obsolescence, damage, or expiration, potentially requiring markdowns or write-offs. Fourth, overstock conceals operational inefficiencies like poor forecasting or suboptimal purchasing practices. For growing ecommerce brands, excess inventory can restrict cash flow exactly when capital is needed most for expansion. The ripple effects include reduced profitability and limited ability to invest in new product development.
Extra inventory refers to stock quantities beyond what's needed to meet customer demand while maintaining reasonable safety stock levels. It represents inventory that exceeds optimal operational requirements. Unlike strategic safety stock, which serves as a buffer against supply chain disruptions or demand spikes, extra inventory provides no business benefit and actually creates costs. For multichannel sellers, particularly those using Amazon FBA alongside other fulfillment methods, extra inventory accumulates storage fees across multiple locations. Managing this excess effectively requires visibility across all warehouses and channels, allowing businesses to rebalance stock before unnecessary reordering.
Excess inventory typically follows several paths. Many businesses first attempt strategic markdowns or promotions to sell through overstock at reduced but still profitable prices. Some create product bundles combining excess items with faster-moving SKUs. When these approaches fail, options include liquidation to specialized inventory buyers (typically at 10-30% of cost), donation to charities (potentially capturing tax benefits), or recycling/disposal (usually at a cost). Amazon sellers with FBA excess can use Amazon's liquidation program, though returns are minimal. In worst-case scenarios, businesses must write off unsellable inventory as a loss, directly impacting financial statements and reducing profitability.
Avoiding excess inventory requires systematic approaches to inventory management. Start by implementing data-driven demand forecasting that accounts for seasonality, trends, and promotional effects. Adopt an ABC analysis methodology to prioritize inventory controls based on product value and turnover rates. Consider just-in-time inventory principles where appropriate to minimize holding costs. Negotiate flexible minimum order quantities with suppliers and develop vendor-managed inventory relationships for key products. Implement regular SKU rationalization to identify and phase out underperforming products. Finally, use inventory planning software with multichannel visibility to optimize stock levels across all sales channels and warehouse locations.
To sell extra stock efficiently, first segment excess inventory by condition, age, and sales potential. For viable products, create limited-time promotions targeting your existing customer base—offer bundle deals, volume discounts, or special pricing. Consider flash sales through your website or marketplace listings. For slow-moving inventory approaching obsolescence, explore specialized B2B marketplaces like Bulq, BoxFox, or Liquidity Services. Multichannel sellers should examine cross-platform opportunities, shifting stock to channels with higher demand or lower fees. Amazon sellers can utilize FBA liquidation programs or removal orders to consolidate inventory. Consider complementary businesses that might purchase your excess at reduced wholesale rates.
Businesses can accurately determine production adjustments by establishing clear inventory thresholds based on sales velocity, lead times, and seasonal patterns. Calculate your optimal inventory levels using formulas that incorporate safety stock requirements and demand variability. Implement daily or weekly monitoring of key metrics like days of supply and sell-through rates. Create automated alerts when inventory approaches predetermined excess thresholds. Use demand planning software to forecast needs more precisely and adjust production schedules dynamically. For multichannel sellers, consolidate data from all sales channels to get an accurate overall demand picture. Review historical performance during similar seasons or events to predict potential overstock situations.
Getting rid of excess inventory frees up valuable working capital that can be reinvested in fast-moving products or growth initiatives. It reduces ongoing storage costs, especially significant for Amazon FBA sellers facing long-term storage fees. Eliminating excess improves inventory turnover ratios, a key performance indicator for operational efficiency and business valuation. It creates physical warehouse space for new product lines or higher-margin items. Additionally, proactively managing excess prevents further value deterioration through obsolescence or damage. For many businesses, especially those with seasonal products, regular excess inventory reduction is essential to maintaining cash flow health and preventing a downward spiral of accumulating carrying costs.
Excess inventory erodes profitability through multiple mechanisms. First, it increases carrying costs—typically 20-30% of inventory value annually—including storage, insurance, taxes, and handling. For Amazon sellers, FBA storage fees compound dramatically for slow-moving items. Second, it ties up capital that could generate returns elsewhere in the business. Third, products often require discounting to move, reducing margins. Fourth, items may become obsolete or damaged, requiring complete write-offs. Fifth, excess inventory hides operational inefficiencies and forecasting errors that continue to drain resources. For growing ecommerce businesses, these profitability impacts can mean the difference between sustainable growth and stagnation.
Excess inventory is calculated by comparing actual on-hand quantities to optimal stocking levels for each SKU. First, determine your optimal inventory level using factors like average sales velocity, lead time, safety stock requirements, and seasonal demand patterns. Then subtract this optimal level from your current on-hand quantity to identify excess. For multichannel sellers, this calculation must account for inventory across all locations. More sophisticated approaches use time-based metrics, flagging as excess any inventory that exceeds projected demand for a specified future period (often 90-180 days). Advanced inventory management systems automate these calculations, applying different thresholds to different product categories based on value and volatility.
To reduce SLOB (Slow-moving and Obsolete) inventory, implement a structured approach starting with proper identification. Use aging reports to categorize inventory by time since last movement, then create action plans by category. For moderately slow movers, try bundle offers, cross-selling promotions, or targeted marketing campaigns. For truly obsolete items, consider aggressive liquidation through closeout channels, donation for tax benefits, or recycling programs. Prevent future SLOB accumulation by implementing regular SKU rationalization reviews and setting automatic alerts when products approach dormancy thresholds. For multichannel sellers, test slow-moving products on different platforms before declaring them obsolete, as performance can vary significantly between channels.
Yes, businesses can write off excess inventory as a tax deduction, but specific rules apply. Generally, you can claim deductions for inventory that has declined in value, become obsolete, or been damaged. Two common methods include: 1) Writing down to market value when inventory's fair market value falls below cost, and 2) Writing off completely worthless inventory as a loss. Proper documentation is essential, including evidence of value decline and disposal efforts. Many businesses prefer donating excess inventory to qualified charities, potentially receiving both a tax deduction and goodwill benefits. Consult with a tax professional before making significant inventory write-offs, as IRS rules can be complex.
For old inventory that doesn't sell, first determine if simple marketing adjustments might help—repositioning, bundling with popular items, or creating special promotions. If these efforts fail, consider strategic liquidation options such as selling to closeout buyers, listing on specialized B2B marketplaces, or using industry-specific liquidation services. Donation to charitable organizations can provide tax benefits while supporting community causes. For items with some salvage value, disassembly or repackaging might recover components for reuse. As a last resort, proper disposal or recycling minimizes environmental impact. The key is acting decisively before non-selling inventory consumes more resources in storage costs and management attention.
Inventory management software reduces excess inventory by providing accurate, real-time visibility across all storage locations and sales channels. It automatically calculates optimal stock levels based on historical sales data, seasonality, and lead times, then generates replenishment recommendations that prevent overbuying. These systems can identify slow-moving products early, enabling proactive markdowns before items become severely excess. For multichannel sellers, advanced software balances inventory across platforms, suggesting transfers between locations before placing new purchase orders. Automated reporting highlights inventory aging and excess capital tied up in stock. The best systems integrate with accounting software, providing financial impact analysis of inventory decisions and helping prioritize which excess to address first.
For seasonal excess inventory, timing is critical. Start with early detection—identify seasonal items trending below forecast midway through their peak selling period. Implement graduated markdowns that increase as the season progresses rather than waiting for end-of-season clearance. Consider geographic transfers if you sell in diverse climate regions with staggered seasonal transitions. Explore off-season storage options with lower costs than premium warehouse space. For future seasons, negotiate return agreements with suppliers before placing orders and develop pre-booking programs with customers to reduce speculation. Many businesses successfully use "flash storage" services that specialize in seasonal inventory holding at variable rates, scaling down costs during off-peak periods.
Excess inventory severely restricts cash flow by locking capital in unsold products instead of maintaining it as liquid assets. This cash constraint limits your ability to pursue growth opportunities, take advantage of supplier discounts, or weather unexpected business challenges. For every $100,000 in excess inventory, a business with 30% margins would need to generate approximately $333,000 in additional sales just to recover the tied-up cash. Storage costs further drain limited resources through warehouse expenses, insurance premiums, and handling labor. The cash flow impact compounds over time as excess inventory often requires additional borrowing, creating interest expenses that further reduce profitability and available operating capital.
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