Inventory Carrying Cost benchmark
Inventory Carrying Cost Benchmark for MRO Distribution (2026)
Last updated July 2026
In mro distribution, inventory carrying cost typically runs 25–35% / yr. Obsolescence risk pushes MRO higher. Inventory carrying cost is the total annual cost of holding stock — capital, storage, insurance, shrinkage, and obsolescence — expressed as a percentage of inventory value. It typically runs 20–30% per year.
Carrying Cost % = (Capital + Storage + Service + Risk costs) ÷ Average Inventory Value Inventory Carrying Cost by industry (2026)
| Industry | Typical Inventory Carrying Cost | What good looks like |
|---|---|---|
| All industrial distribution | 20–30% / yr | Under 20% is well-managed |
| MRO Distribution | 25–35% / yr | Obsolescence risk pushes MRO higher |
| Oil & Gas Distribution | 25–40% / yr | High-value idle spares raise the risk component |
| Industrial Distribution | 25–40% / yr | Wholesale holding often exceeds 25% |
| Chemical & Process Manufacturing | 25–35% / yr | Reliability spares raise the obsolescence component |
| Electrical Distribution | 22–32% / yr | Faster mix eases holding cost |
| PVF Distribution | 25–38% / yr | Deep tails raise the risk component |
| Utilities & Power | 25–40% / yr | Long-held critical spares raise carrying cost |
Inventory carrying cost is the total annual cost of holding stock — capital, storage, insurance, shrinkage, and obsolescence — expressed as a percentage of inventory value. It typically runs 20–30% per year.
Where does yours land? If mro distribution operations want to move inventory carrying cost in the right direction, the fastest lever is usually the excess and obsolete tail — the SKUs holding cash without serving demand.
Sources: Institute for Supply Management (via NetSuite), Industrial Supply Magazine
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