Dead Stock Identification and Clearance: A Practical Playbook

Spot dead stock with ageing buckets, run a structured markdown plan, and recover working capital through smart liquidation channels.

What counts as dead stock

Dead stock is inventory that has not moved in a defined window, typically 90, 180, or 365 days depending on your industry. Unlike slow-moving stock that occasionally sells, dead stock ties up cash, occupies warehouse space, and quietly destroys margin through carrying costs. Industry benchmarks suggest dead stock should never exceed five percent of total inventory value. Identifying it early is the difference between a markdown and a write-off.

Build ageing buckets that expose the problem

Segment stock into clear ageing buckets: 0 to 30 days, 31 to 90, 91 to 180, 181 to 365, and over 365 days. Calculate inventory value and unit count in each bucket per SKU and per category. Anything sitting in the 180-plus buckets deserves a weekly review, while 365-plus is a code-red liquidation candidate. Ageing reports must be run at least monthly to catch problems before they compound.

Design a tiered markdown strategy

Start with a gentle ten to fifteen percent discount in the 91 to 180 bucket, ramping to twenty-five percent in the 180 to 365 range. Bundle dead SKUs with fast movers as combos so customers feel they are getting value, not damaged goods. For the over-365 bucket, accept that you may need to sell at or below cost to free up working capital. Discipline matters more than depth, mark down on a schedule, not on emotion.

Liquidation channels worth exploring

B2B liquidation platforms, factory outlets, employee sales, and corporate gifting buyers can absorb dead stock without damaging your retail pricing. For seasonal goods, plan an end-of-season warehouse sale rather than holding for next year, which usually fails. Donations to registered NGOs can also unlock a tax deduction under Section 80G while clearing space. Whichever channel you pick, document every clearance write-off so your auditor accepts it cleanly.

Catch dead stock early with BillBabu reports

BillBabu automatically tags SKUs with last-sold dates and computes ageing buckets without any manual spreadsheet work. The Dead Stock report highlights at-risk inventory by value, helping you prioritize markdowns and clearance drives. You can drill down by category, supplier, or branch to find the root cause of slow movement. Try it free at billbabu.com to turn your trapped cash back into working capital.

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