What is Dead Stock?
Inventory that doesn’t turn over, also referred to inventory that doesn’t sell, is often referred to as dead stock. If a business doesn’t have software for their inventory management, dead stock can remain on warehouse shelves for long periods at a time. If inventory is “dead” and sitting around gathering dust, it’s not doing you any good.
Dead stock can costs a company a lot of money. After all, you can’t reclaim the costs of unsold goods that are manufactured themselves or those that are purchased from another company. In addition, dead stock has storage costs and takes up premium warehouse space that could be used to house a company’s best selling products.
How To Avoid Dead Stock
To avoid dead stock and its associated expense, consider doing the following:
- Try ordering smaller quantities when you offer new products, at least until you know how it will sell.
- Use inventory management software that can alert you to issues so they can be addressed in a timely way.
- Use your resources to determine new product offers, you should be never guessing or using your personal interest.
- Feedback loops are super valuable, be sure to survey customers to learn what other products they want.
What To Do With Dead Stock
While some dead stock will need to leave storage in a garbage truck, there are ways to recoup some of the initial investment in some situations. Possibilities include:
- Consider donating it to a charity for a tax-write off
- Give it away as a gift with a purchase
- Give to brand new customers that open an account up
- Selling to close out and liquidation retailers
- Try bundling them with other products for a special price
- If you have apparel, sell your dead stock to a consignment store
In some cases, dead stock represents products that are no longer available for sale. When used in that manner, the phrase is usually spelled as one word: deadstock.
Sometimes, merchandise that is no longer available is coveted simply because it can’t be found in stores. In those situations, it can sometimes be sold for a premium price. Sneakers, which are often sold on brand imaging more than on shoe function, are popular “deadstock” items that can be found for sale online and identified in searches as “deadstock.” Vintage apparel is also a popular deadstock category. When a product is no longer available, the premium it can demand can be very high and that presents an opportunity for you.
In most product situations, however, dead stock refers to inventory that wasn’t sold and needs to be disposed of to make room for money-making counterparts.
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