Marketable Inventory v Consumable Inventory When You Sell A Business

Inventory Value. Sell a Business. Buy a Business. Business Broker Tampa

If you’re working with a business broker, and perhaps making an offer to buy a business or you are preparing to sell your business, you might come across a couple different variations of the term inventory. Here we do a quick explanation of the difference  between marketable inventory and consumable inventory.

Marketable Inventory

Marketable inventory refers to the goods that a business holds with the intention of selling them to customers. This type of inventory is crucial for generating revenue. Here are some key points about marketable inventory:

  1. Purpose: The primary purpose of marketable inventory is to be sold to customers. These items are the products that a business offers in its retail stores, online platforms, or through wholesale channels.
  2. Examples:
    • Retail Stores: Clothing, electronics, groceries, books, etc.
    • Warehouses: Bulk goods, finished products awaiting distribution, etc.
    • Manufacturers: Finished goods ready for sale to retailers or end consumers.
  3. Location: Marketable inventory is typically stored in places where it can be easily accessed and sold, such as store shelves, display units, warehouses, or distribution centers.
  4. Revenue Generation: Selling marketable inventory directly contributes to the business’s revenue. The sale of these goods is the primary source of income for many businesses.
  5. Management: Proper management of marketable inventory is essential to ensure that the right amount of stock is available to meet customer demand without overstocking, which can lead to increased holding costs or obsolescence.

Consumable Inventory

Consumable inventory, on the other hand, includes items that a business uses internally to support its operations but does not sell to customers. These items are essential for maintaining day-to-day business functions. Here are some key points about consumable inventory:

  1. Purpose: Consumable inventory is used in the business’s operations and is not intended for resale. These items are essential for the smooth functioning of the business.
  2. Examples:
    • Office Supplies: Paper, pens, printer cartridges, etc.
    • Cleaning Materials: Detergents, brooms, mops, etc.
    • Manufacturing Components: Lubricants, screws, small tools, etc.
    • Operational Supplies: Packaging materials, safety gear, etc.
  3. Location: Consumable inventory is often stored in storerooms, supply closets, or other designated areas within the business premises where they are easily accessible for internal use.
  4. Cost Management: While consumable inventory does not generate revenue directly, it incurs costs that need to be managed efficiently. Effective tracking and control of consumable inventory help minimize wastage and ensure that these items are available when needed.
  5. Consumption: These items are gradually used up in the course of business activities. For example, office supplies are consumed by employees, cleaning materials are used to maintain cleanliness, and manufacturing components are used in the production process.


In summary, marketable inventory consists of items intended for sale to customers and is a direct source of revenue. In contrast, consumable inventory includes items used internally to support business operations and does not directly generate revenue but is essential for the smooth functioning of the business. Proper management of both types of inventory is crucial for the overall efficiency and profitability of a business.

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