Inventory Costs

Definition: Inventory costs refer to the expenses associated with acquiring, producing, storing, and managing the goods a business intends to sell. These costs typically include raw materials, labor, storage, and other overhead expenses tied to inventory management.

Example: A candle maker purchasing wax, wicks, and jars to create candles and paying for storage space to keep the finished products incurs inventory costs.

Resources:

• Inventory Management Software: Tools like Craftybase are designed specifically for handmade businesses to track inventory costs and usage.
• Accounting Software: Platforms like QuickBooks help track inventory expenses for tax and financial reporting.
• Supplier Directories: Websites like Alibaba or Uline offer bulk supplies for managing inventory.

Learn More: Check out our guide to understand how inventory costs impact taxes and pricing strategies for handmade crafts businesses.