Why Deadstocks Die In The First Place

Posted on 25 Feb, 2020

Whether you’re a local brick and mortar store or a large-scale business organizations, the common cry of all businesses is dead stock. Dead stock refers to the excess inventory which has been on the shelves for a very long time. Since slow-moving inventory also stays on the shelves for a considerably long time, distinguishing between dead stock and slow-moving inventory can be a little difficult.

While the slow-moving inventory is mostly seasonal products which still have a chance to go off the shelves but non-moving inventory, also referred to as dead stock for the obvious reasons, have very rare chances of making it back to the ‘selling’ item list again. Irrespective of whether you are aware or not, holding on to dead stock costs your business and leads to a loss which is beyond time to repair. So, the moment you realize you have dead stocks piling up, find out ways to get rid of them and earn a decent profit.

While you’re finding out ways to convert your dead stock into cash, let’s delve a little deeper into the reasons and find out why inventory turns into a dead stock. You know prevention is always better than cure. Besides, there won’t be dead stock if you already know what causes a healthy inventory to turn into non-moving inventory and have a plan to avoid that in place. Below is an in-depth analysis of factors that converts a healthy inventory into a dead stock.

1.  Incorrect Market Predictions: Incorrect market predictions is one of the major reasons why businesses end up with dead stock in the first place. Incorrect market predictions = increased risk of ending with excess stock, which, later, would surely occupy space on the shelves. Once a product hits the end of its life cycle, it won’t sell anymore.

2. Poor Product Quality And Design: Products designed poorly or products that don’t match the design and quality expectations of the customers will soon lose the demand and turn into a non-moving inventory. Though it would not only affect the lifecycle of that particular product, the reputation of the brand also goes for a toss.

3. Inefficient Supply Chain: Inefficient supply chain leads to longer lead time. Needless to say, long lead time leads to accumulation of inventory which loses their life cycle and never goes back off the shelves.

4. Lacking A Dead Stock Management Plan: Holding on to your stock which is likely dead with a hope that they would sell again is only going to cause dead stocks to pile up, which isn’t what efficiency sounds like. Instead, take help from an inventory management expert and formulate an inventory management plan to mitigate the risk and avoid obsolete stocks from accumulating.

What can be done to get rid of Dead Stock? 

There are numerous ways businesses can get rid of their piling up dead stock. For instance, items from the dead stock can be sold as a complementary or free product with a selling product, businesses can announce a sale, etc. Though, one of the best ways to convert non-moving inventory into decent profits is by finding a buyer interested in buying all of it. As a business owner, you can list it on Hotshelf and wait for interested buyers to contact you. Hotshelf is an online marketplace that lets business owners from distant corners to connect with each other and trade.