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Reducing inventory

Question
When can having inventory be a bad thing? 
Answer
When you have too much. Excess inventory can hurt your company in several ways.

- It ties up cash, which could be used more productively in paying down debt or pursuing alternative opportunities.

- It increases expenses by taking up expensive physical space.

- It can increase your insurance and taxes.

- It exposes you to risks associated with shrinkage, obsolescence, and damage related to excess handling, and other losses. 
Brain Trust contributor: Editor, Streetwise Small Business Book of Lists
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