Every warehouse has a shelf nobody visits. The products on it were bought for a reason: a customer who changed their mind, a discount that made 500 units look sensible, a variant that was replaced. The reason is gone and the stock is still there.
That stock is called dead stock when it has stopped moving altogether, and slow-moving stock when it still moves, but far more slowly than you bought it. Both tie up money, space and attention, and both get worse the longer they are ignored.
What it costs
Dead stock looks free once it is paid for. It is not.
- Capital. €20,000 of dead stock is €20,000 not available for the products that do sell, or sitting on an overdraft at interest.
- Space. Shelf space has a cost per square metre, and dead stock often occupies the most accessible shelves because it arrived when they were empty.
- Handling. It gets counted, moved aside, insured and, eventually, written off.
- Loss of value. Most products are worth less every month they sit: fashion and electronics quickly, spare parts slowly, perishable goods completely.
A common estimate puts the yearly cost of holding stock at 20% to 30% of its value. On €20,000 of dead stock that is €4,000 to €6,000 a year, for goods that will probably sell for less than they cost.
How to find it
Two reports, used together, catch dead stock early.
Age. For each product, how long ago did the units you still hold arrive. Group products into bands: under 30 days, 31 to 60, 61 to 90, 91 to 180, over 180. Anything in the top band deserves a question. Age is weighted by quantity, so a product with 90 units from last week and 10 from last year will look young. Check the oldest batch date too.
Turnover. For each product, how many times a year is the stock on hand used up. A product with usage in the period but 400 days of stock is slow. A product with no usage at all, and stock on the shelf, is dead.
Then look at the last movement date. A product whose last movement was a delivery, eight months ago, has never been used since it arrived. That is the clearest signal of all.
Do this once a month, not once a year. A product that goes quiet in March is still clearable in April. By December it has lost most of its value.
Six ways to clear it
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Sell it at a lower price. The first discount is usually the cheapest. Waiting for a better price rarely works, because the product’s value falls faster than the market recovers.
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Bundle it. Pair the slow product with a fast one as a kit, or use it as a component in something you assemble. A finished product that uses a dead component converts it into stock that moves.
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Return it to the supplier. Some suppliers take back unopened stock against a restocking fee, especially if you place a new order at the same time. Ask before the goods are a year old.
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Move it to where it sells. A product dead in one location may still move in another. Check stock by location before you discount.
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Donate it or scrap it. When the stock is worth less than the cost of handling it, write it off. A clean write-off, recorded with a reason, is better for your accounts than stock valued at a cost it will never fetch.
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Stop buying it. The most important step. Lower the reorder settings or remove the product from automatic reordering before the next order goes out.
Stopping it coming back
Dead stock is created at purchase time. Three habits prevent most of it:
- Order to cover days of actual usage, not to a round number or a discount tier.
- Review new products after three months. Those that have not moved should not be reordered.
- When a product is replaced by a new version, stop ordering the old one on the same day.
How StockBold shows it
The inventory ageing report in StockBold puts every product into one of five fixed age bands, from 0 to 30 days up to over 180, based on the quantity-weighted age of the stock you hold today. Each row shows the stock, its value, the average age and the days since the last movement, and the list opens sorted with the oldest first. Click a product to see the oldest batch date and how the age was calculated.
The product turnover report classifies each product as fast, medium, slow or dead for the period you choose. Dead means no usage recorded, or nothing left to turn. Filter the ageing report by the over 180 band and the turnover report by the dead band, and the shelf nobody visits is a list with a value at the bottom.
To clear a product, record a stock-out with a comment for a write-off, or use it as a component in an assembly so the finished product carries its cost. To stop it coming back, lower the product’s cover days and safety stock, or switch off its automatic reorder calculation.
Read more about stock valuation and reports, or the help guide on the inventory ageing report.