Dead stock (or obsolete stock) is inventory that has stopped selling — items with no sales over a sustained period and no realistic prospect of selling at full price. It sits in the warehouse consuming cash, space and attention.
Dead stock, in plain English
Every warehouse has shelves nobody visits. Products bought for a season that never came, lines superseded by a newer version, MOQ surpluses from years ago. The stock is physically fine — commercially, it's dead.
What dead stock really costs
- The cash itself — money paid to suppliers that will never come back at full value.
- Holding cost — space, insurance, handling; commonly estimated at 15–25% of stock value per year.
- Opportunity cost — pallet positions and budget that fast-moving lines can't use.
- Balance-sheet drag — stock is an asset on paper until an auditor asks why it hasn't moved in 18 months.
What causes it
- Over-buying to hit an MOQ or a bulk discount that never paid back.
- Forecasting on hope — "this line will pick up" — instead of the sales data.
- No early-warning system: dead stock is always months old before anyone notices.
- Range creep: adding new variants without retiring old ones.
How to deal with it
- Find it early — flag anything with no sales in 6–12 months (industry-appropriate) and a coverage figure of "years".
- Act in order of recovery value: discount and bundle first, then return-to-supplier deals, then bulk sale to clearance buyers, then write-off (often with tax relief) as the last resort.
- Prevent the next batch: the cheapest dead stock is the pallet you never buy. Better forecasts and MOQ-aware ordering stop it at the purchase order.
Optimal Chain surfaces dead and at-risk stock automatically: every product shows its months of coverage against forecast demand, so "4.2 years of stock" jumps off the screen instead of hiding in a spreadsheet. And because purchase recommendations are forecast-driven and MOQ-aware, the platform stops the next generation of dead stock at the moment it matters — before the order is placed.