How to Deal with Dead Stock in Your Inventory Management

Dead stock is inventory that hasn’t moved in at least a year. Dead stock is locked up money that isn’t contributing to the growth of your business. It uses up warehouse space that could otherwise be used for fast-moving products. If your warehouse has no extra capacity, then responding to an upsurge in demand for a popular product will require renting or buying additional warehouse space which might not have been necessary if you weren’t saddled with your dead stock.

You also spend money storing and taking care of it. This is money spent on rent, utilities, security, and insurance. Dead stock is a kind of freeloader that doesn’t pull its weight and will pull your business down in the long-term.

A significant price reduction might be enough to trigger demand for the product. You may not sell at a profit and perhaps suffer a loss, but clearing the dead stock off your shelves is better for the long-term health of your business.

Combine and sell it with related products at a discount. If these related products are fast movers, then so much the better. You will quickly get the dead stock off your hands. These bundles can be a product in their own right if sold as a kit. For example, there are facial kits, first aid kits, fire pit kits, repair kits, survival kits, and so forth.

Set up a coupon web page that lists discount codes. This will attract people who are attracted to deals. The motives of these people will vary. For example, some people buy things at discount so that they can resell them on eBay, Amazon, or Craig’s List at a profit. You could also do this yourself but it takes time, effort, and skill, so it’s best to sell directly to these entrepreneurs. Other people, known as couponers, enjoy the challenge of living frugally by taking advantage of discounts.

There are lots of websites that sell surplus inventory. Many well-known sites get thousands of visitors a day who are looking for bargains.

Depending on the items and your supplier, you may be able to negotiate a return. The reason you can’t sell the items may not exist with your supplier who has no problem selling them. This means she should willingly take them back. However, you may have to pay a restocking fee.

Finally, you should identify poor performers before they become dead stock. This will require inventory management software that keeps track of the performance of your inventory stock items. You can set up rules that tell the software to flag poorly performing inventory rather than automatically reordering them. For more information on this type of software, contact us.