Dead stock: how to find it and what to do with it

Every shop has a shelf of things that do not sell. The phone case for a model nobody owns any more. The second colour of a jumper that looked like a safe bet. The case of something bought on a good discount that turned out to be a good discount for a reason.

That shelf is not neutral. It is cash you paid a supplier, sitting still, taking space that could hold something that sells. The good news is that dead stock is easy to find once you look, and most of it can be turned back into money.

What counts as dead

A working definition: a product with stock on hand and no sales for a set period. The period depends on what you sell:

• Fast-moving goods such as groceries, snacks and toiletries: 30 to 60 days without a sale is a problem.
• General retail such as homewares, gifts, stationery and hardware: 90 days.
• Slow, seasonal or high-value lines such as furniture, some tools, winter coats in summer: 180 days, judged against the season.

Pick a period per category and stick to it. The point is a consistent rule, not a perfect one.

“Slow” stock, selling but far below what you hold, deserves a look too. If you have forty of something that sells two a month, you own nearly two years of it.

What it actually costs

The price you paid is only the start. Dead stock also costs:

• Cash. Money in stock cannot pay rent, wages or the supplier of the thing that does sell.
• Space. A shelf of dead stock is a shelf not holding your best seller, which may be the one that just ran out.
• Decay. Packaging fades, fashions move, dates pass, models are replaced. Most dead stock is worth less every month you keep it.
• Attention. It gets counted at every stock take, moved every time you rearrange, and dusted.

So the question is rarely “how do I get full price for this?” It is “how do I get the most cash back, soonest?”

How to find it

You need two lists:

1. Everything you hold, with stock on hand and value at cost.
2. Everything that sold in the period, with units sold per product.

Anything on the first list that is missing from the second, or barely on it, is your candidate list. Sort it by stock value, highest first. The top of that list is where the money is; ten products usually account for most of it.

Do this once a quarter at least. Checking which products are sitting still is also one of the five numbers worth checking weekly if you want to catch it earlier.

Six ways to turn it back into cash

Work down this list roughly in order. The earlier options keep more of your margin.

1. Move it

Before discounting anything, try a better spot. Eye level, near the till, or next to a product it goes with. Some stock is dead only because nobody sees it.

2. Bundle it

Pair a slow line with a fast one: a phone case with a screen protector, a candle with a gift bag. A bundle at a small saving moves the slow item without advertising a markdown on it alone.

3. Mark it down, in steps

Discount in stages rather than all at once: for example 20 percent off, then 40 percent two weeks later, then 60. Put it in one clearly marked clearance spot. Set the end point before you start, so it does not drift for months.

4. Return it or swap it

Ask the supplier. Many will take back unsold stock, especially if you are ordering something else from them, or swap it for a line that sells. You rarely get this if you do not ask.

5. Sell it elsewhere

Online marketplaces, a stall at a market, another shop in a different area, or a clearance trader who buys job lots. The price will be low. It is still better than nothing and better than next year.

6. Write it off, or give it away

If nothing works, write it off and clear the space. Donating to a charity may bring goodwill and, in some countries, a tax deduction; ask your accountant. Recording the write-off properly also keeps your stock records honest, which matters for the next count.

Stop buying it in the first place

Dead stock is decided the day you order it. A few habits prevent most of it:

• Check sales history before every reorder, not just the stock level.
• Buy new lines in small quantities first, and reorder once they prove themselves.
• Be wary of volume discounts on products you have not sold before. A good price on something that does not sell is not a saving.
• Set reorder levels per product, so fast lines are topped up and slow ones are not.

There is more on the other half of this, the products that sell out, in stop running out of your best sellers.

Where StoreWave sits

StoreWave does not yet have a single “not sold in 90 days” report, so finding dead stock takes the two lists above. The inventory report lists every product with its stock and stock value, and exports to a spreadsheet. For the second list, the stock movement report exports every movement in a date range with its product and reason; filter it to sales and you have everything that sold. It exports up to 1,000 movements at a time, so a busy shop should export a month or a week at a time and combine them. A lookup between the two files gives you the candidate list. For a single product, the same report shows every sale, delivery and adjustment with its date, so the last time it sold is easy to see.

Every product carries its own reorder level and its own cost price, which is updated as a weighted average on every delivery, so stock value reflects what you actually paid. Products with sizes and colours track each variant separately, which matters here: it is usually one size or one colour that is dead, not the whole line. There is more on stock and variants.