Dead Stock
Inventory that hasn't sold and is unlikely to sell, tying up capital.
Inventory that hasn't sold and is unlikely to sell, tying up capital.
Why It Matters
Dead stock ties up capital that could be invested in marketing or better-selling products. It also consumes warehouse space and may eventually be written off. Proactive dead stock management protects margins and cash flow.
Practical Example
Scenario
An accessories brand audits their inventory and identifies dead stock.
Calculation
Total inventory: $250,000. Items with zero sales in 180+ days: $42,000 (17%). Carrying cost: $42,000 × 25% annually = $10,500/year wastedResult
Running a clearance sale at 60% off recovers $16,800 cash while eliminating $10,500/year carrying cost—net positive even with margin loss.
Pro Tips
- 1Define 'dead' by time (no sales in 90-180 days) and act systematically
- 2Clear dead stock through: flash sales, bundles, B-stock channels, donations (tax benefit)
- 3Analyze why items became dead—inform future purchasing decisions
- 4Better to sell at 50% off than hold for years hoping demand appears
Common Mistakes to Avoid
Frequently asked questions
Put it to work
Related Terms
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