dead-inventory (1)

Disposing of Excess or Dead Inventory

2 minute read
When you bought it, it seemed essential.

Now, over a long sales cycle, it’s just sitting there and taking up space. There’s still a chance that it will sell, that someone will want one or two pieces. So instead of doing something about it, the stuff sits there taking up space and sucking up time and money on the off-chance that someone, somewhere, will want to purchase the item. Look at the signs telling you to suck it up and move that dead inventory out the door.

  1. When did it come in? How long have the goods been with you? Start from the day it was received. Has it been on the shelves for a year or more?
  2. How much is left of it? If you haven’t done a cycle count, you’re missing out on vital information about an item’s movement. Counting once per year isn’t going to give you the detailed picture
  3. What was the rate of return? How many times and for what reasons was the product returned to the shipper?
  4. How many times did customers reorder the product? If customers ordered the item once and then never again, try calling and asking them why? Their feedback is often enlightening. Odds are the item did not move for them, either.
  5. What was the rate of defects or damaged goods? Once a product shows up defective or damaged, it’s generally returned or confirmed as destroyed. If the item had a high rate of damage in shipping or defective after arrival, it might not be high on the list to be purchased again.
  6. How much time is spent on servicing the merchandise? Inventory costs more than the capital used to acquire it and the shipping costs. There are costs associated with maintaining merchandise that adds to the cost of goods.


Get Your Ducks in a Row

Small businesses need to implement inventory control and have an understanding of logistics. It is vital in a highly competitive environment – whether it is retail, wholesale, e-commerce, or supply – to keep track of every link in the supply chain. Anyone can make a bad decision or see an otherwise sound investment tank due to forces outside their control. With a small investment in barcoding equipment, inventory control, and pick–to–light systems, business owners can make an investment in their future and ride out economic tough times when larger and better-financed companies can’t make it.

But technology can’t do it alone.

When you have stock that isn’t moving, it is time to find a way to offload and clear it away for items that sell consistently. To that end, and depending on the product, you may need to place the SKU on a severe clearance telling either at or below cost or even in some instances sell it for scrap. You may need to take a loss, but that loss will be temporary and not an ongoing drain on company resources.