Key Takeaway: Dead stock doesn't announce itself. It just sits there, quietly costing storage space and capital, until someone finally decides to write it off at a fraction of its value.
What's on This Page
What Counts as Dead Stock
Most businesses define dead stock as anything with no sales in 90+ days, though the right threshold depends on your category. Fast-moving categories might use 60 days, slower categories like furniture might use 180.
Why It Costs More Than It Looks Like
Dead stock isn't just "stuck". It's actively costing carrying cost every single day (see Inventory Carrying Cost Explained), occupying space that could hold something that actually sells, and getting closer to obsolescence or expiry the whole time it sits there.
A Practical Clearing Process
- Flag it early: review stock at 60 days with no sales, not just 90+
- Markdown in stages: 20% off at 90 days, 40% at 120, clearance pricing at 150
- Bundle it: pair slow movers with fast movers instead of discounting alone
- Set a hard exit: after a fixed point, it goes to liquidation rather than sitting indefinitely
A furniture store used exactly this kind of firm 120-day rule to cut showroom dead stock in half. See the full case study.
For further reading, see the Association for Supply Chain Management (ASCM).
Checklist
- Run a report of all stock with no sales in the last 90 days
- Calculate that dead stock's value as a percentage of total inventory
- Sort dead stock by how long it's been sitting
- Set markdown stages: for example 20% at 90 days, 40% at 120, clearance at 150
- Identify any dead stock eligible for bundling with a fast-selling product
- Set a hard exit point after which stock goes to liquidation
Common Mistakes
FAQ
What counts as dead stock exactly?
Most businesses use 90 days with no sales as the threshold, though faster-moving categories may use 60 days and slower categories like furniture may use 180.
Should dead stock always be marked down?
Markdown is the most common fix, but bundling with a fast-moving product or returning to the supplier (if the terms allow) can sometimes recover more value.
How much dead stock is considered normal?
Under 5% of inventory value is generally healthy. Meaningfully above that suggests a purchasing or demand-forecasting issue worth investigating.
Does dead stock affect anything besides the write-off itself?
Yes. It occupies storage space that could hold faster-moving inventory and continues accumulating carrying cost the entire time it sits unsold.
Calculate This For Your Business
Related Guides in the Inventory Academy
- Inventory Carrying Cost Explained. what dead stock actually costs you daily
- ABC Inventory Analysis. identifying which SKUs are worth this attention
- Why Inventory Mistakes Destroy Small Businesses. another guide in the Inventory Academy