---
id: "prereq-inventory-carrying-costs"
type: "prereq"
source_timestamps: ["§ The Store as a Logistics Hub", "¶3"]
source_title: "The Comeback of the Physical Store—and What It Means for Your Business"
source_url: "https://hbr.org/2026/04/the-comeback-of-the-physical-store-and-what-it-means-for-your-business"
tags: ["supply-chain", "macroeconomics"]
related: ["concept-store-as-logistics-hub", "action-optimize-returns-routing"]
reason: "Higher interest rates increase inventory-carrying costs, making the store's ability to rapidly reallocate and sell returned goods a critical financial advantage."
sources: ["tail1"]
sourceVaultSlug: "hbr-seg-tail1"
originDay: 1
articleStem: "hbr-tail-114-comeback-physical-store"
sourceUrl: "https://hbr.org/2026/04/the-comeback-of-the-physical-store-and-what-it-means-for-your-business"
sourceTitle: "The Comeback of the Physical Store—and What It Means for Your Business"
---
# Basic knowledge of supply chain inventory carrying costs

**Why it's required:** The authors note that **higher interest rates increase inventory-carrying costs** — the cost of capital tied up in unsold stock, plus storage, insurance, obsolescence, and markdown risk.

This makes the store's ability to rapidly inspect, reallocate, and resell returned or imbalanced goods ([[action-optimize-returns-routing]]) a critical financial advantage. Without grasping carrying costs, the reader misses why the [[concept-store-as-logistics-hub|logistics-hub role]] is not just operational convenience but margin protection in a high-rate environment.