It represents money and resources wasted.įor most businesses, dead stock sits on shelves taking up space until it’s forgotten. This is why dead stock is a bad thing for your business. This often means businesses will hire additional workers to manage the load. Most people don’t realize it, but dead stock often leads to an increased need for employees.Īll of that inventory sitting in a warehouse takes up space, needs maintenance, and so on. The longer items sit on shelves, the more these costs increase. Storage, insurance, utilities, and so on are all common holding costs. Holding costs cover all the costs you incur while sitting on dead inventory. If you never sell them, you never recoup that investment. You’ve paid for the items sitting in your warehouse. ![]() Obviously, lost revenue is another way dead stock costs your business. Wasting space on products that have no chance of selling means you’ve lost the opportunity to stock other products. You can’t carry every item on the market. Here are four of the key ways that dead stock costs your business money: ĭead stock takes up space, and that space could be used to warehouse items that would actually sell and generate revenue for your business.įor most companies, physical inventory space is limited. Is it better to order a three years supply of a product today and stockpile it for the future, or is it smarter to order just what you need now and continually replenish as needs dictate? The problem is that overstocking these items and creating dead stock costs you money you didn’t have to spend. Some items are not fast sellers, but do sell over time. There’s nothing wrong with keeping emergency stock on hand to head off unexpected supply issues. In some cases, they may actually be right. Sometimes they’ll insist these items are just slow movers and that they’ll sell the products “eventually.” Unwilling to admit they’ve made a mistake, they’ll justify their dead stock as “emergency stock” or a stockpile for future sales that just haven’t happened yet. Many times, companies are in denial about their dead stock levels. And sometimes companies just overorder on items that will never sell.ĭead stock can easily become one of the biggest revenue drains for your business, yet most companies fail to realize just how much dead stock sitting in their warehouses is impacting their bottom line.ĭetermining if you have dead stock items in your stock rooms and warehouses and then figuring out how to prevent taking on more unsellable products in the future is a key way to positively impact your company’s revenue. Upgraded product variants can make older models obsolete, turning them into dead stock. However, dead stock isn’t just seasonal items that are past their prime. Any 2020 calendars you had leftover after January 1st, 2021 are essentially dead stock, because it’s incredibly unlikely you’ll ever sell them. Seasonal items are often cited as the most common examples of dead stock. It’s taking up space in your warehouse and on your accounting sheet. ![]() It’s stock that doesn’t sell and has a high likelihood of never selling.ĭead stock represents lost revenue because you’re paying for stock that isn’t selling, and you’re paying to store that stock too. What is Dead Stock?Īs the name implies, dead stock is stock that’s just languishing in your warehouse for an extended period of time. Today, we’ll tell you how to stop dead stock from killing your company. Yet unlike the vampires and masked killers of the late-night creature features I grew up with, dead stock is a real threat to your business and something that should keep you awake at night. The name alone sounds ominous, like something straight out of a horror movie. ![]() What is Dead Stock: Learn The Causes and How to Manage Itĭead stock. Amazon FBA Inventory Management – Fulfillment by Amazon (FBA) software features, Better Seller Performance Ratings, FBA Shipping and FBA reporting features.Training & Support – SkuVault training, On-boarding packages, Customer Service and Support information.Datacoach – Deep Insights into your warehouse and inventory, early indicators for warehouse problems, metrics to benchmark performance and labor optimization.Inventory Management Reporting – Advanced analytics, Replenishment Report, Just in Time (JIT), Drop Shippings, Re-Ordering, Out of Stock, and Purchase Order Reporting Features.Pick, Pack, Ship – Inventory picking, Hyper Picking, Interactive wave picking, Quality Control, Holds, Daily Deals and Flash Sales, Print-to-order, and shipping features.eCommerce Inventory Management – Barcoding, Cycle Counting, Real-time data syncs, and Quantity buffers features.Catalog Features – Detailed product listings, Kitting and Bundling, Assembled Products, Lots, FEFO, FIFO, and Serialization features.Supply Chain – Manage suppliers, Inventory Forecasting, Advanced Purchase Order Features, and PO Receiving features.
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