{"id":29240,"date":"2023-11-08T10:52:27","date_gmt":"2023-11-08T10:52:27","guid":{"rendered":"https:\/\/localhost:10003\/?p=29240"},"modified":"2024-08-16T13:03:36","modified_gmt":"2024-08-16T12:03:36","slug":"what-is-dead-stock","status":"publish","type":"post","link":"https:\/\/www.ecommercefulfilment.com\/resources\/inventory-management\/what-is-dead-stock\/","title":{"rendered":"What is dead stock?"},"content":{"rendered":"\n<p>It\u2019s not uncommon for the number of SKUs a business sells to grow as the business does. When this happens, it gets much more difficult to manage inventory, and we can end up forgetting about those products lying on the shelf that nobody has bought.<\/p>\n\n\n\n<p>Without proper <a href=\"\/inventory-management-guide\/\">inventory management<\/a>, dead stock tends to accumulate over time and eat away at your profits. In this article, we\u2019ll cover everything you need to know to understand and get rid of dead stock, and even prevent it from ever accumulating in the first place.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">In this article<\/p>\n<\/div><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.ecommercefulfilment.com\/resources\/inventory-management\/what-is-dead-stock\/#what-is-dead-stock\" >What is dead stock?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.ecommercefulfilment.com\/resources\/inventory-management\/what-is-dead-stock\/#why-you-want-to-avoid-dead-stock\" >Why you want to avoid dead stock<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.ecommercefulfilment.com\/resources\/inventory-management\/what-is-dead-stock\/#what-leads-to-dead-stock\" >What leads to dead stock?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.ecommercefulfilment.com\/resources\/inventory-management\/what-is-dead-stock\/#how-to-shift-dead-stock\" >How to shift dead stock<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.ecommercefulfilment.com\/resources\/inventory-management\/what-is-dead-stock\/#keep-inventory-moving-with-j-j-global-fulfilment\" >Keep inventory moving with J&amp;J Global Fulfilment!<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-is-dead-stock\"><\/span>What is dead stock?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Dead stock, sometimes referred to as \u2018obsolete inventory\u2019, are products that a business no longer expects to sell. Such products might be outdated due to low demand, for passing their expiration dates, because they\u2019ve been discontinued entirely, or other reasons.<\/p>\n\n\n\n<p>We only attribute the term \u2018dead stock\u2019 to stock that has never been sold. <a href=\"\/returns-management-guide\/\">Returns that haven&#8217;t been resold<\/a>, for example, are not considered to be dead stock.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"why-you-want-to-avoid-dead-stock\"><\/span>Why you want to avoid dead stock<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Having an excessive amount of dead stock can really hurt the profitability of a business. And the bigger the monster in the closet gets, the more resources you\u2019ll need to direct towards removing it. Here are the biggest reasons why you should always avoid having lots of dead stock.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Unnecessary storage costs<\/h3>\n\n\n\n<p>Non-moving stock doesn\u2019t just take up space; it costs your business money to keep it in storage. You could be using that storage space for products that actually sell, increasing sales and lowering <a href=\"\/inventory-costs-guide\/\">inventory costs.<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Opportunity cost<\/h3>\n\n\n\n<p>The time and money spent on keeping dead stock and actually getting rid of it could be much better spent elsewhere. For growth, businesses need to be smart with their money, investing in places that drive the highest return.<\/p>\n\n\n\n<p>It would be much better to make an investment in marketing, sales processes, product development or a large list of other business activities, rather than using capital to remove dead stock.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Risk of depreciation or obsolescence<\/h3>\n\n\n\n<p>Dead stock can be particularly bad if you\u2019re selling goods with an expiry date, like food and drink, supplements, or cosmetics. Obsolete items can\u2019t be sold at a discounted price, placed into bundles, or even donated. The only way to get rid of expired stock is to waste it, at your expense.<\/p>\n\n\n\n<p>Even if you\u2019re not dealing with products that can expire, stock that hasn\u2019t sold for a long time can still depreciate in value or fall out of trend.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-leads-to-dead-stock\"><\/span>What leads to dead stock?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The businesses that tend to accumulate excessive dead stock are the ones with a long list of SKUs or that have grown rapidly. In both circumstances, inventory housekeeping is difficult without the right knowledge or tools.<\/p>\n\n\n\n<p>Below, we\u2019ve detailed some of the most common reasons dead stock occurs.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Lack of inventory visibility<\/h3>\n\n\n\n<p>How can a company be expected to keep track of inventory issues &#8211; and be proactively in preventing them from happening &#8211; if they have poor visibility of their stock?<\/p>\n\n\n\n<p>Inventory visibility is an often overlooked aspect of running an eCommerce business, and often only enters the conversation when a company has already run into problems, such as having excessive dead stock.<\/p>\n\n\n\n<p>By having the tools to foster good stock visibility earlier &#8211; like <a href=\"\/fulfilment-software\/\">real-time inventory management software<\/a> &#8211; you can be proactive in preventing issues like dead stock before they become a problem.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Inaccurate forecasting<\/h3>\n\n\n\n<p><a href=\"\/demand-planning\/\">Forecasting<\/a> is all about having the right amount of stock at the right time. You can use historical inventory data to track the peaks and troughs in demand throughout the year, which informs the amount of stock you order.<\/p>\n\n\n\n<p>A lack of proper forecasting can result in either too little stock \u2014 which can result in a stockout \u2014 or having too much. Dead stock can arise as a result of the latter, as you can order stock that there isn\u2019t a demand for, and so it ends up gathering dust on the storage shelf.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Flawed pricing strategy<\/h3>\n\n\n\n<p>It\u2019s important to regularly review your pricing strategy, particularly in relation to where your competitors are pricing similar goods.<\/p>\n\n\n\n<p>If your market research concludes that there is demand for your product and it fails to sell, it could be because your competitors are undercutting you. While multiple factors dictate where you choose to price your product, if customers don\u2019t see the value, they won\u2019t pay the price of admission, resulting in excess product trapped in storage.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Lack of promotion<\/h3>\n\n\n\n<p>Similarly, if you know there is demand for your product and you\u2019re confident in your pricing strategy, dead stock might accumulate if you fail to promote it effectively. That\u2019s not just informing your customers that a product exists, it\u2019s about celebrating its value and making it stand out from the crowd.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"how-to-shift-dead-stock\"><\/span>How to shift dead stock<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>So you\u2019ve identified a bunch of SKUs that haven&#8217;t sold, and want to clear them out of storage while recuperating as much cost as possible. Unless you\u2019re dealing with expired products, you should always avoid simply throwing them in the trash (or, more likely, paying someone to throw them in the trash for you).<\/p>\n\n\n\n<p>At the very least, you should donate dead stock to a charity or cause that could make use of them. However, if you\u2019d like to make clearing out dead stock as cost-effectively as possible, here are some options.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Promotions and marketing<\/h3>\n\n\n\n<p>In the first instance, it\u2019s always worth trying to breathe new life into your dead stock by running a fresh round of promotion and marketing. It\u2019s a low-risk way to gauge interest and perhaps sell your forgotten stock at full price.<\/p>\n\n\n\n<p>Consider building a social media campaign around the specific SKUs you want to push and place them front and centre on your website. You may or may not wish to apply a discount at this stage &#8211; it depends on how confident you are of making a sale at full price.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Discounts and bundles<\/h3>\n\n\n\n<p>If you\u2019ve spent some time showing off your dead stock but it\u2019s still failing to sell, now\u2019s the time to think about offering a discount or placing the stock into a bundle.<\/p>\n\n\n\n<p>Before offering a raw discount, you could try applying a discount when customers reach a certain threshold in their basket, or offering the discount out to your most loyal customers.This can work in both your and your customer\u2019s favour; you can shrink your dead stock while simultaneously building customer loyalty.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Mystery Boxes<\/h3>\n\n\n\n<p>Another creative way to address dead stock is by selling mystery boxes. These curated packages of assorted items can be a fun and intriguing option for customers who enjoy surprises.<\/p>\n\n\n\n<p>By bundling slow-moving products into mystery boxes, you can generate interest and excitement, increasing the likelihood of selling off items that were previously stagnant.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Wholesale<\/h3>\n\n\n\n<p>Selling wholesale is a strategic approach to tackle dead stock in your inventory. By offering your excess or slow-moving products to other retailers or wholesalers at a discounted price, you can quickly free up valuable storage space and generate revenue.<\/p>\n\n\n\n<p>Wholesale buyers often purchase in larger quantities, which can help you move surplus stock more efficiently than selling items individually<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"keep-inventory-moving-with-j-j-global-fulfilment\"><\/span>Keep inventory moving with J&amp;J Global Fulfilment!<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If you\u2019re struggling with stock visibility or need help with turning dead stock into sales, J&amp;J can help. James and James are a 3PL who are backed up by custom-built, <a href=\"\/fulfilment-software\/order-management-system\/\">award-winning inventory management software<\/a> that\u2019s designed to provide eCommerce businesses with unrivalled stock visibility.<\/p>\n\n\n\n<p>Our software, ControlPort, lets you see exactly which products are failing to sell and breaks down how much that dead stock is costing you. Our Client Services Team will work with you to identify SKUs that are costing you money and help you devise a plan to shift that stock in the most cost-effective way.<\/p>\n\n\n\n<p>To learn more, please don\u2019t hesitate to book a free consultation with one of our fulfilment specialists. Call us on <a href=\"tel:+44 (0)333 200 9954\">+44 (0)1604 968 820<\/a> or fill in an <a href=\"#requestQuote\">online form<\/a> to arrange a call and get started.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It\u2019s not uncommon for the number of SKUs a business sells to grow as the business does. When this happens, it gets much more difficult to manage inventory, and we can end up forgetting about those products lying on the shelf that nobody has bought.<\/p>\n","protected":false},"author":22,"featured_media":29254,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_lmt_disableupdate":"yes","_lmt_disable":"","footnotes":""},"categories":[370],"tags":[],"class_list":["post-29240","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-inventory-management"],"acf":[],"modified_by":"James Dillon","featured_image_src":"https:\/\/www.ecommercefulfilment.com\/wp-content\/uploads\/2023\/11\/Dead-stock.png","featured_image_src_square":"https:\/\/www.ecommercefulfilment.com\/wp-content\/uploads\/2023\/11\/Dead-stock.png","author_info":{"display_name":"Neil Sant","author_link":"https:\/\/www.ecommercefulfilment.com\/author\/neil-sant\/"},"_links":{"self":[{"href":"https:\/\/www.ecommercefulfilment.com\/wp-json\/wp\/v2\/posts\/29240","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ecommercefulfilment.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ecommercefulfilment.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ecommercefulfilment.com\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ecommercefulfilment.com\/wp-json\/wp\/v2\/comments?post=29240"}],"version-history":[{"count":0,"href":"https:\/\/www.ecommercefulfilment.com\/wp-json\/wp\/v2\/posts\/29240\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ecommercefulfilment.com\/wp-json\/wp\/v2\/media\/29254"}],"wp:attachment":[{"href":"https:\/\/www.ecommercefulfilment.com\/wp-json\/wp\/v2\/media?parent=29240"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ecommercefulfilment.com\/wp-json\/wp\/v2\/categories?post=29240"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ecommercefulfilment.com\/wp-json\/wp\/v2\/tags?post=29240"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}