When you decide how much to order from a supplier, it's easy to focus only on the unit price and the volume discount. What almost nobody factors in is what it costs to let that stock sit in the warehouse until it sells — and with financing more expensive in 2026 than it was a couple of years ago, that cost is no longer a rounding error.
Here we quantify the real cost of carrying inventory, why it's risen, and how to calculate the order quantity that minimizes total cost — not so large that you tie up excess capital, not so small that you multiply order-processing costs.
What carrying stock actually costs
Operations-sector analyses put inventory carrying cost at 20% to 30% of stock value per year for a well-run business — with technology or fashion products, exposed to obsolescence, at the higher end of that range. This isn't one line item: it bundles the financial cost of tied-up capital, storage, insurance, shrinkage/breakage, and the risk of the product losing value before it sells.
For a wholesaler carrying €300,000 in average stock, a 25% carrying cost works out to €75,000 a year — money that doesn't show up as a single invoice, but spread across interest, warehouse rent, and capital that isn't available for anything else.
And financing is pricier than it was a year ago
The financial component of that carrying cost has climbed in 2026. In the second quarter of the year, a net 42% of eurozone firms reported higher interest rates on their bank loans, up from 26% the quarter before, and SMEs specifically reported worsening credit availability relative to large companies. Funcas projects a 12-month Euríbor averaging around 2.3% for 2026. Every euro tied up in stock is a euro you can't use to pay down pricier debt or avoid taking on more financing.
The math: the order quantity that minimizes total cost
Economic Order Quantity (EOQ) is the order size that balances the cost of placing orders (which falls the fewer, larger orders you place) against the cost of carrying stock (which rises the more inventory you have sitting around):
EOQ = √(2 × annual demand × cost per order ÷ carrying cost per unit)
Illustrative example (sample figures — swap in your own in the calculator below): a SKU with 12,000 units of annual demand, a €10 unit cost, a €50 cost per order placed (admin, shipping, receiving), and a 25% carrying cost (€2.50 per unit per year) gives an EOQ of √(2 × 12,000 × 50 ÷ 2.50) = ≈ 693 units per order — about 17 orders a year, roughly once every three weeks. Ordering the whole year's stock at once would cut order-placing to a single event, but would blow up carrying cost; ordering weekly would cut carrying cost but multiply order-processing expenses.
With carrying cost climbing on the financing side, your SKUs' EOQ is shifting too — a calculation you ran a year ago with a 20% carrying cost may now be recommending larger orders than actually make sense.
Calculate your economic order quantity
Upload your catalog as a CSV and calculate the order quantity that minimizes ordering + holding cost for every SKU — with a free account you'll see the potential savings versus your current order quantities.
Go to the EOQ calculator →What to do with this
- Work out your real carrying cost rather than using the example's 25% blindly — add your current financing cost, warehouse rent, and historical shrinkage for each product category.
- Prioritize recalculating EOQ first for your highest-value-in-stock SKUs — they tie up the most capital, and that's where optimizing order size saves the most in euros.
- If your financing cost has risen this year, recalculate EOQ even if nothing else about the business changed — the optimum shifts just because money got more expensive.
Sources
- Inventory carrying cost as a percentage of stock value (20–30% annually): APQC, "Inventory carrying cost as a percentage of inventory value".
- Rising eurozone bank-loan interest rates (Q2 2026) and worsening SME credit access: Banco de España, press release, May 12, 2026.
- 12-month Euríbor forecast for 2026 (≈ 2.3%): Menudas Empresas, "Tipos de interés y liquidez en la empresa española: qué esperar de 2026".
The annual demand, cost per order, and unit cost in the worked example are illustrative — built from sample numbers to explain the calculation, not a statistic about any industry. Swap in your own business's real numbers using the calculator.