Worked examples
A failed product test
| Dead stock units | 300 |
| Cost per unit | $12.00 |
| Annual holding rate | 25% |
| Capital tied up | $3,600.00 |
| Annual holding cost | $900.00 |
$3,600 frozen, plus $900 a year in rent for goods producing nothing.
Seasonal leftovers
| Dead stock units | 800 |
| Cost per unit | $22.00 |
| Annual holding rate | 28% |
| Capital tied up | $17,600.00 |
| Annual holding cost | $4,928.00 |
$17,600 locked up and nearly $5,000 a year to keep it that way.
Frequently asked questions
When does slow stock officially become dead stock?
A practical e-commerce rule: no sales in 90 days for evergreen products, or unsold 30 days after its season ended for seasonal goods. Some merchants use "will not sell out within 12 months at the current rate." The exact threshold matters less than having one and reviewing it monthly — dead stock that is never labeled dead never gets dealt with.
Is it better to liquidate at a loss or keep waiting?
Run the math this calculator shows: holding dead stock costs 20–30% of its value every year, so a unit that might sell at full price "someday" loses a quarter of its value annually while waiting. Recovering even 40–50 cents on the dollar today frequently beats a full-price sale 18 months out — and the freed cash can be reinvested in products that actually turn.
What are the best ways to move dead stock?
In descending order of recovery: bundle it with bestsellers (hides the markdown, moves units at near-full value), run a clearance section or flash sale (30–60% recovery), sell through liquidation marketplaces or jobbers (10–30%), and donate for a tax deduction where eligible. Match the channel to the value at stake — a $40,000 problem justifies negotiating with liquidators; a $2,000 one just needs a clearance email.
How do I prevent dead stock in the first place?
Most dead stock is born at the purchase order. Test new products with small initial buys even when the per-unit price stings, set reorder quantities from actual sell-through rather than supplier minimums where possible, and review a days-of-inventory report monthly so slow movers get marked down at 60 days instead of written off at 400. Prevention costs margin points; dead stock costs the whole margin.
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Part of the Inventory collection.