Dead Stock Analysis: Identifying and Clearing Slow-Moving Inventory

Dead stock is inventory that has not sold for an extended period — typically defined as 90 days for fast-moving consumer goods or 180 days for slower-moving categories.

Dead stock is a hidden cost that shows on your balance sheet as an asset but is actually a liability:

• Capital cost: the money tied up in unsold stock is not available for reinvestment
• Carrying cost: warehouse space, insurance, and management time for stock that isn't selling
• Opportunity cost: the warehouse space could hold better-turning products
• Risk of full write-off: stock that has been dead for 6+ months may become unsellable (expired, out of fashion, damaged) and need to be written off entirely

Ask AskBiz:

• *'Which products have had zero sales in the last 90 days?'*
• *'Show me products with more than 180 days of stock on hand at current sell rate'*
• *'What is the total value of inventory with a days cover of more than 120 days?'*

Filter by: category, supplier, warehouse location (if multi-location).

Once identified, classify by severity:

• Slow-moving (60–120 days): mark for promotion
• Very slow (120–180 days): mark for markdown
• Dead (180+ days): mark for clearance or write-off consideration

1. Promote aggressively: bundle with fast-movers, feature in email campaigns, add to 'clearance' section of your website. For eCommerce, reduce the price on the listing and increase ad spend on the product.

2. Discount on marketplace: if you have excess stock that doesn't sell on your DTC site, list it at a lower price on Amazon, eBay, or a discount platform. Lower margin but recovers some value.

3. Sell to a liquidator: stock clearance companies buy dead stock in bulk at 10–30p on the pound. You recover some cash and clear warehouse space.

4. Donate: some categories allow tax-deductible donation of dead stock to charities. Confirm with your accountant.

5. Write off: if stock has no recoverable value (expired, damaged, completely obsolete), write it off. Taking the loss clears the balance sheet and prevents dead stock being treated as an asset in future valuation discussions.

Dead stock is usually created by over-buying. The root causes are:

• Over-optimistic forecasting: buying for a demand level that didn't materialise
• MOQ pressure: buying more than needed to hit supplier minimums
• Trend misreads: buying into a trend that didn't hold
• Poor variant balance: buying the wrong size/colour mix

Prevention:

• Use AskBiz demand forecasting before placing orders
• Negotiate lower MOQs with suppliers (especially for new or unproven SKUs)
• Test new products in small quantities before committing to large runs
• Review variant sell-through rates after each season and adjust the mix for the next buy