Repair Shop Parts Inventory: 30% Tied Up Capital (Accelerate Turnover)
Mobile phone repair shop SGD 200K annual revenue. Parts inventory: SGD 50K (6 months of stock). Turnover: 4x/year (sell through entire inventory every 3 months). Working capital: SGD 50K tied up = 25% of annual revenue. Cost of capital: 4% = SGD 2K/year. Optimization: reduce to 90-day stock (SGD 30K) via just-in-time + supplier reliability = free SGD 20K + save SGD 800/year interest.
Why Repair Shops Overstock#
Parts are cheap individually (SGD 10-500). But variety is huge (100+ part SKUs for phone repair). Most shops stock "just in case" = overstocking by 50-100%. Result: SGD 50K tied up, slow turnover (4x/year), obsolescence risk (parts become irrelevant as devices change).
The Inventory Math#
Repair shop SGD 200K annual revenue, 40% COGS (parts + labor) = SGD 80K parts cost. Stock SGD 50K = 7.5 months of parts on hand. Turnover: 4x/year (sell through 1/4 of inventory per quarter). Better: turnover 6-8x/year (2-month stock = SGD 13K-20K). Free capital: SGD 30K-40K.
(1) Supplier partnerships: identify top 5-10 part suppliers.
Just-In-Time Parts Supply#
(1) Supplier partnerships: identify top 5-10 part suppliers. (2) Weekly orders: order exactly what you need (short-lead-time parts). (3) Safety stock: only high-volume parts (chargers, screens). (4) Obsolescence management: depreciate slow-moving parts every quarter.
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AskBiz Parts Turnover Tracking#
Tracks turnover per part. "Chargers: 24x/year turnover (0.4 months stock = SGD 200). Screen replacements: 12x/year (1 month stock = SGD 1K). Camera modules: 2x/year (6 months stock = SGD 5K, slow mover). Recommendation: reduce camera module stock to 3 months (if supplier reliable), free SGD 2.5K. At 4% cost of capital, save SGD 100/year."
- Mobile phone repair shop SGD 200K annual revenue.
- Parts inventory: SGD 50K (6 months of stock).
- Turnover: 4x/year (sell through entire inventory every 3 months).
People also ask
What inventory turnover is healthy for repair?
Best: 8-12x/year (monthly stock). Good: 6-8x/year. Average: 4-6x/year. Poor: <4x/year.
How do I manage obsolescence?
Quarterly review: depreciate parts not sold in 6 months by 50%. If still not sold in 12 months: write off (loss). Reduces tied-up capital.
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Optimize Parts Inventory (Free SGD 20K-50K Working Capital)
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