Inventory · 4 min read · Free
Too Much of One Model Can Turn a Good Deal Into a Bad Decision
Concentration risk matters even when every unit has margin.
Buying five good units is not automatically smart if most of your cash ends up in the same product. Think about how quickly you could sell them if demand weakened tomorrow.
What it is
Managing concentration risk even when each individual unit appears profitable.
Why it matters
A market drop or demand slowdown can hit all identical units at once.
When to use it
Use before bulk purchases or repeated buys of one model.
How to do it
Set a maximum dollar or percentage exposure per model based on volatility, sell-through, and your total inventory capital. Negotiate quantity if an attractive lot exceeds the limit.
Worked example
Five laptops at $850 each look profitable, but $4,250 in one model may be too much if your total inventory budget is $8,000 and the model is depreciating quickly.
Your action plan
- Calculate current exposure by model
- Set a cap
- Compare next purchase with cap
Common mistakes
- Thinking good unit economics eliminate concentration risk
- Using reserve cash to complete a bulk buy
- Ignoring market release cycles
Key takeaway
A good deal repeated too many times can become a portfolio problem.
Try this
Set a maximum number or dollar exposure for one model before your next bulk offer.
Put what you learn into practice
Continue learning with full free courses, ready-to-use templates and calculators.
Explore Resell Lab