What is the value of the money in your packaging stock? Stock value and inventory turnover for Q4
,
by Verpakkingdeals.nl
6 min reading time
A cupboard full of boxes and tape is working capital lying idle. This is how you convert your packaging stock into euros and weeks, and determine your reorder point before the autumn peak.
Take a look at your packaging cabinet and count what’s there. Four hundred boxes, two rolls of tape, a roll of bubble wrap, a stack of envelopes, and a bag of seals. If you calculate it at cost price, you'll find five to eight hundred euros worth of cardboard and plastic waiting for orders that have yet to come in. That's not an expense — you still have it, after all — but it is money that you can't use for inventory that you *do* sell.
Just before the fourth quarter, this is a relevant consideration. You don't want to run out of boxes in the week of Black Friday, but you also don't want a cabinet full of material in January that you won't use until the following autumn. Below is a way to get a clear picture of this, with actual prices from the assortment.
Step 1: Convert your inventory to a monetary value
Create a list for each item: quantity in stock × purchase price per item. That's your inventory value. For most small webshops, there are three items that together account for eighty percent of the amount: boxes, tape, and void fill material.
It's not about precision down to the cent. It's about having one number: this is how much money is in the cabinet. Without that number, "we still have enough boxes" remains a feeling instead of a decision.
Step 2: Convert to weeks instead of items
Two hundred boxes means nothing. Two hundred boxes with thirty packages per week says everything: that's almost seven weeks of stock. Divide the quantity in stock by your average weekly consumption, and you get a number that you can immediately assess.
Rough guidelines that work well in practice for a small webshop:
Four to six weeks for your most used box size and your standard tape. Enough margin, not so much that it gets in the way.
Eight to ten weeks in the run-up to a peak, only for the two or three items you truly use every day.
Two to three weeks for sizes and variations you rarely use. Selling out is cheaper than having half a pallet gathering dust.
Also, look at your peak week, not your average week. If you ship thirty packages in a normal week and seventy in your busiest week, then a "six average weeks" supply suddenly becomes only two and a half weeks during that busy period.
Step 3: Buy deep where you are sure, narrow where you are in doubt
Bulk packaging is cheaper per unit — that's exactly why it exists. But the profit isn't equally large everywhere. With tape, you see the difference clearly:
An important side note: rolls differ in length. Therefore, don't just compare the price per roll, but also what's on each roll — that's stated on the product page. A roll that seems cheaper but is shorter will cost you more per package. The same applies to price stickers: 5000 white price stickers cost €9.95, while the MX-5500 Pricing Gun with 50,000 stickers costs €59.95. The latter is significantly cheaper per sticker, but only makes sense if you actually label tens of thousands of items.
The rule of thumb: buy deep what you use in every order and what doesn't spoil or go out of style — tape, your standard box, void fill material. Buy narrow what is tied to a season, a color, or a promotion.
Step 4: Determine your reorder point before you run out
The time to reorder is not "when the last stack has been started," but as soon as you fall below your reorder point. You calculate that reorder point with three numbers: consumption per week, lead time in weeks, and a buffer.
Example: you use forty boxes a week, delivery takes about a week, and you want a one-week buffer. Your reorder point is then 40 × 2 = 80 boxes. If your stack drops below eighty, you reorder — even if eighty boxes feels like a lot. During a peak period, you double that buffer, because that's when the chance of delays and a spike in your sales is greatest.
What you should better not stock up on
Three categories yield the most stagnant inventory:
Too many different sizes. Each additional box size is its own stack that runs out separately. Two to four sizes cover the vast majority of orders for most webshops.
Seasonal prints and colors. Fun in November, but still sitting there in March. Deliberately buy a small quantity of these and use neutral material with a sticker for the rest of the year.
Items you "might" use. A sealing machine, a second dispenser, special envelopes: great purchases if you use them weekly, dead money if they remain in the cabinet.
Do you already have such a stack? Then don't treat it as a loss, but as inventory with a purpose: use unusual sizes for returns, samples, or loose shipments to suppliers, and use colored boxes during the next promotional period.
Counting once a quarter is enough
Set aside half an hour in your agenda at the beginning of each quarter: count, convert to weeks, and adjust your reorder points. That's all that's needed. What you gain from it is that you'll never run out of tape halfway through a busy week again, and you won't have a cabinet full of material in January that you'll be using for twelve months.
Choosing a USB hub for working from home: 2.0 or 3.0, how many ports, and with switches
· 3 min reading time
Choosing a USB hub for working from home: 2.0 or 3.0, how many ports and with switchesYour desk needs three USB devices, but your laptop only has two ports. Or...
Power outages in autumn: emergency supplies you'll actually use
· 2 min reading time
Autumn Power Outages: Emergency Supplies You'll Actually Use October to December. Heating isn't in full swing yet, but the nights are getting long and cold. If a power outage strikes...
Choosing a power bank: capacity, charging speed, and weight compared
· 2 min reading time
Choosing a Power Bank: Capacity, Charging Speed, and Weight Compared Your phone dies when you're out and about. The classic emergency solution is a power bank. But what capacity do...
