Although good inventory management is difficult to achieve, it is nevertheless crucial to ensure the sustainability of a company. The latter must know how to juggle between anticipating demand and reality. One false step and the risk of stock shortage or dead stock appears without warning. And today, we will talk specifically about this dead stock, or dormant stock.

What is dead stock?

If a stock has a very low or almost non-existent turnover rate, beware, it is probably a dormant stock or a dead stock. These are in fact products that sell with difficulty or that hardly sell at all. Despite their harmless appearance from afar, they represent a significant cost for the company. The more time they spend in the warehouse, the more expensive they are.

This cost can be seen in 3 levels:

 – storage: we must maintain the place where it is located in particular

 – space: it takes up space that could have been devoted to other products

 – capital: this could have been invested in a more profitable project

Where does the dormant stock come from?

– Poor demand forecasting

– Supplier delivery error 

– Unforeseen events occurring in the market

– Changing customer behavior 

– Customer Returns

How to avoid dormant stocks?

– Equip yourself with a stock management software or entrust your logistics to professionals

Meticulous monitoring of your sales volume and inventory with inventory management software helps avoid dormant inventory. Alternatively, you can also outsource your management to a company like Marquis Transport and Logistics to keep dead stock to a minimum.

– Be constantly on the lookout

Follow the news closely so as not to be surprised by the trend. Everything that happens on social networks can indeed influence negatively the market behavior regarding one product or another.

– Partner with suppliers for returns

Consider returning surplus merchandise to your suppliers. If it is still in good condition, they can take it back under certain conditions before it becomes dormant stock.

How to get read of a dead stock?

– Liquidate unsaleable stock

Consider returning surplus merchandise to your suppliers. If it is still in good condition, they can take it back under certain conditions before it becomes dormant stock.

– Throw it away

Throwing away is radical but sometimes essential. Especially if the expiration date has passed, it is better to throw away and learn from your mistakes.

– Selling at a dead stock market-place

Several market-places buy back the dead stock in bulk to resell it at discounted prices. So it’s up to you to partner with or contact these places to try to make even a small profit.