Case study
Inventory cost cut 63%, turned into margin.
In a single year of focused inventory management, storage, aged-stock, and write-off costs were stripped out of this brand's P&L, and every dollar saved landed in profit. Operating margin climbed from 11.7% to 19.7% while the business carried leaner inventory.
Inventory holding and waste cost
$46,146 to $17,094 / yr
Storage cost
$32,355 to $15,132 / yr
Inventory cost per unit
$0.40 to $0.24
Operating net margin
11.7% to 19.7%
In dollars
The value delivered in dollars.
Inventory costs are pure overhead. Every dollar removed flows straight to the bottom line. Here is the real money taken out of the cost base.
$29,052
Annual inventory cost removed
Holding and waste cost dropped from $46,146 (2024) to $17,094 (2025), a 63% cut.
$11,179 / yr
Recurring efficiency savings
At today's volume, running at the old 2024 cost-per-unit would cost about $11.2K more every year. This is pure efficiency, not lower sales.
+$16,500
Direct margin contribution
Inventory cost intensity fell 0.95 points of revenue, adding about $16.5K to annual profit at current scale.
What we did
Run as the single source of truth.
We replaced reactive ordering and spreadsheets with the Restock AI inventory system, then ran it as the single source of truth for every reorder and storage decision.
The system reads each SKU's live sell-through and turns it into a clear restock call, so the brand orders the right quantity at the right time instead of overbuying into storage fees. Aging and storage-fee alerts surface slow movers early, before they cross long-term storage thresholds or hit disposal. Stock is placed across FBA and lower-cost upstream storage so bestsellers stay available while reserves sit cheap. The result is a tighter, repeatable replenishment loop that keeps inventory operations lean and cost per unit falling as the brand scales.
The breakdown
Where the cost came out.
Three cost lines move directly with inventory discipline: how much stock you hold, how long it sits, and how much you write off. All three fell hard.
| Cost line | 2024 | 2025 | Change |
|---|---|---|---|
| FBA storage fee | $32,254 | $13,960 | down 57% |
| Long-term storage fee | $100 | $33 | down 67% |
| AWD storage fee | n/a | $1,138 | low-cost buffer |
| Storage subtotal | $32,355 | $15,132 | down 53% |
| FBA removal fee | $13,441 | $1,957 | down 85% |
| FBA disposal fee | $350 | $5 | down 99% |
| Removal and disposal subtotal | $13,792 | $1,962 | down 86% |
| Total inventory holding and waste | $46,146 | $17,094 | down 63% |
Inventory holding and waste cost
Total dollars per year
2024: $46,146. 2025: $17,094.
Inventory cost per unit
Efficiency, stripped of sales-volume effects
2024: $0.40. 2025: $0.24.
The proof
Why these numbers are real.
Absolute cost drops can be misleading if a business simply sells less. So the same improvement is shown three ways, all pointing the same direction.
| Measure | 2024 | 2025 |
|---|---|---|
| Inventory cost (absolute) | $46,146 | $17,094 |
| As % of revenue | 1.94% | 0.99% |
| Cost per unit sold | $0.40 | $0.24 |
Whether measured in total dollars, as a share of revenue, or per unit moved, the cost of carrying inventory fell across the board. That consistency is the proof the gain is structural, driven by how inventory is planned and placed, not by a one-off or a quieter sales year.
The bottom line
How inventory discipline improved profit.
Lower inventory cost is only worth talking about if it reaches the bottom line. It did. As inventory cost intensity fell, operating margin rose in lockstep.
| 2024 | 2025 | |
|---|---|---|
| Revenue | $2,376,541 | $1,730,837 |
| Inventory holding and waste | $46,146 | $17,094 |
| as % of revenue | 1.94% | 0.99% |
| Operating net profit | $278,529 | $340,958 |
| Operating net margin | 11.7% | 19.7% |
Operating net margin
Take-home margin, year over year
2024: 11.7%. 2025: 19.7%.
The brand earned $341K operating profit in 2025, more than 2024, on lower inventory cost. Leaner inventory produced a bigger bottom line.
What drove the result
Four moves did the work.
Demand-based replenishment kept inventory matched to real sell-through, so less stock sat in fulfillment centers soaking up storage fees.
Aged alerts and sell-through monitoring stopped SKUs from crossing long-term storage thresholds and growing stale.
Tiered storage placement moved reserve stock into lower-cost upstream buffer while keeping FBA lean.
Cost discipline compounded as inventory cost per unit fell, so the savings improved margin as the brand kept selling.
Case study based on anonymized client data, FY2024 to FY2025. Not a guarantee of future performance.
Want to see what tighter inventory control looks like in your business?
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15-minute call. We look at your channels and revenue and tell you straight whether we can move the number for you.