Every store has a corner of the shelf that nobody looks at: a colour that never caught on, last season's model. These items are dead stock: products you still hold that no longer sell, or sell so slowly that they will not clear in any reasonable time.
Dead stock is easy to ignore because it does not cause a crisis. This guide shows a simple manual method to find dead stock and the practical options for clearing it.
What dead stock costs you
Dead stock costs more than its purchase price:
- Tied-up cash. Money spent on items that do not sell is money you cannot spend on items that do.
- Storage space. Shelves full of slow items leave less room for bestsellers.
- Loss of value. Fashion, electronics, food and seasonal goods lose value over time, and some expire.
A quick way to see the scale:
Cash tied up in dead stock = units of dead stock × unit cost
Step 1: Decide what "dead" means for your store
There is no universal threshold. A bakery and a furniture shop sell at very different speeds. Base it on how fast your products normally sell:
Days since last sale = today − date of the last sale of the SKU
Then set two thresholds that fit your rhythm. An example for a store that sells most items every week:
- Slow: no sale in 60 days (example).
- Dead: no sale in 120 days (example).
Seasonal products need a different test: compare with the same season last year, not with the last few weeks.
Step 2: Find candidates with a simple sheet
You do not need a special report. Once a month, make a sheet with one row per SKU:
| Column | How to fill it |
|---|---|
| SKU | From your catalog |
| Units on hand | From your stock count |
| Unit cost | From the supplier invoice |
| Last sale date | From your order or stock history |
| Days since last sale | Today minus last sale date |
| Units sold in the last 90 days | From your order or stock history |
Add one more calculated column:
Months of cover = units on hand ÷ average units sold per month
Example: 40 units on hand selling 2 a month is 20 months of cover: too much, even though it still sells.
Sort by days since last sale, then by cash tied up, and start at the top.
Step 3: Understand why it stopped selling
Before you discount, find the reason. The fix depends on it:
- Poor presentation: weak photos, a thin description, a confusing title.
- Wrong price compared with similar items in your own catalog.
- Wrong variant mix: the model sells, but you over-ordered one size or colour.
- Demand moved on: the trend or season has passed.
If the cause is presentation, a better page may be enough. If demand has moved on, it is time to clear the stock.
Seven ways to clear dead stock
- Improve the product page. New photos (see Product Photos on a Small Budget: A Practical Guide for Online Shops), a clearer description, better category placement.
- Mark it down and show the old price. A visible "was" price explains the reduction. In some markets there are rules about which earlier price you may show; check them (general information, not legal advice).
- Feature it on a sale page where bargain hunters look first.
- Use a promo code for a short campaign aimed at existing customers.
- Pair it with a bestseller as a gift or an offer on the product page text.
- Move it to another location where it sells better, such as a shop floor.
- Return, donate or write off. Some suppliers take items back; donating may make sense for some goods; a write-off at least frees the space and makes your stock numbers honest.
Check the margin before you discount
Profit after markdown = sale price after discount − unit cost
Example: an item with a unit cost of 12 and a price of 30. A 40% markdown gives a price of 18 and a profit of 6 per unit. A 70% markdown gives 9, a loss of 3 per unit, but it may still be better than holding the item for another year if the space and cash are worth more.
Example: three SKUs on the sheet
Here is an example with made-up numbers. A store reviews its sheet and finds 3 SKUs with no sale in more than 120 days:
- Scarf, olive: 25 units × cost 8 = 200 tied up.
- Lamp, brass: 6 units × cost 35 = 210 tied up.
- Notebook set: 60 units × cost 3 = 180 tied up.
Total: 590 of cash on the shelf. The owner rewrites the lamp page with new photos, marks the scarf down 30% with a "was" price, and runs a two-week promo code for the notebook set. After a month, whatever is left of the scarf goes to a deeper markdown.
How to prevent it next time
- Order a smaller first batch of new products and reorder when they prove themselves.
- Review the variant mix: order fewer units of the sizes and colours that sell least.
A dead stock checklist
- [ ] Set slow and dead thresholds in days.
- [ ] Build a monthly sheet with last sale date and months of cover.
- [ ] Calculate the cash tied up per SKU.
- [ ] Find the reason before you discount.
- [ ] Check the margin of each markdown.
- [ ] Choose an action and a date to review it.
Finding and clearing dead stock in RedCart
RedCart keeps stock per warehouse and per SKU, and every change is recorded in the movement log: restock, sale, adjustment, transfer in and transfer out. Each sale is recorded there as a movement of its SKU, which gives you the data for the last-sale and recent-sales columns of your sheet.
To clear stock, set a compare-at price and the product appears on your storefront's deals page automatically; remove it when the sale ends and it leaves the page. The database rejects a compare-at price lower than the price. Promo codes, percent or fixed, can run with a start and end time. Transfers move stock to a warehouse where it sells better, and adjustments record write-offs with a trace.
In short
Define dead stock by days since last sale, review a simple sheet monthly, find the cause, check the margin and clear the items before they lose more value.
If you would like to keep your stock and sales in one place, create a RedCart account.