Question for dealers regarding timing of transactions/inventory holdings
Longacre
Posts: 16,717 ✭✭✭
What is the maximum number of days that you tend to keep items in inventory, before it does not make economic sense to continue to hold the item? For example, suppose you use your line of credit with a bank at a 5% interest rate (to use a round number) to purchase a coin for inventory, and you mark the coin up by 10% (again, using a round number). Do you track at what point the interest expense on your loan makes it no longer viable to hold the piece in inventory and then you look to sell it to another deal at wholesale? Or stated differently, do you track the amount of sunk capital that you have in your inventory versus how that capital can be better used to make other inventory purchases of items that may move more quickly? And does all of this affect your buying and selling decisions. Just curious. Thanks.
Always took candy from strangers
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
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