{"id":4527,"date":"2022-11-26T01:52:30","date_gmt":"2022-11-26T01:52:30","guid":{"rendered":"https:\/\/www.shipbob.com\/au\/inventory-kpis\/dead-stock\/"},"modified":"2025-09-26T16:29:37","modified_gmt":"2025-09-26T16:29:37","slug":"dead-stock","status":"publish","type":"page","link":"https:\/\/www.shipbob.com\/au\/inventory-kpis\/dead-stock\/","title":{"rendered":"Dead Stock"},"content":{"rendered":"\n<section class=\"wp-block-shipbob-blocks-section-hero-standard-form hero-standard\"><div class=\"container row\"><div class=\"col hero-standard-content\"><h1 class=\"hero-standard-title \">Dead Stock: Why It&#8217;s a Problem &amp; How to Eradicate It<\/h1>\n<p class=\"wp-block-paragraph\">Offloading dead stock is essential to maintaining healthy profit margins, but ecommerce brands are often challenged with&nbsp;<a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-optimization\/\">inventory optimisation<\/a>&nbsp;as they grow their business. It\u2019s often due to a lack of&nbsp;<a href=\"https:\/\/www.shipbob.com\/inventory-management\/\">inventory management<\/a>&nbsp;systems and processes that cause dead stock to accumulate over time.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"#h-what-causes-dead-stock\">What causes dead stock?<\/a> <\/li>\n\n\n\n<li><a href=\"#h-7-ways-to-profitably-get-rid-of-dead-stock\">How to get rid of it and maintain profits?<\/a> <\/li>\n\n\n\n<li><a href=\"#cost-dead-stock\">How to calculate the cost of dead stock<\/a><\/li>\n\n\n\n<li>And more importantly, <a href=\"#h-how-to-stop-dead-stock-before-it-starts\">how to avoid dead stock inventory with proper inventory management?<\/a><\/li>\n<\/ul>\n<\/div><div class=\"col hero-standard-form offset-1  \"><div class=\"card hero-home-customer-card form-card\"><h3 class=\"form-title\">Request Fulfilment Pricing<\/h3><h3 class=\"h4 form-subtitle\">Let&#8217;s talk. Our experts can help you boost your order volume by 30% year over year.<\/h3><p class=\"form-copy\"><\/p><div class=\"card-body form-fbd53fc0-a20b-4df6-8df7-0fa1e8d5b8d4\" data-controller=\"form-controller\" data-form-controller-form-id-value=\"fbd53fc0-a20b-4df6-8df7-0fa1e8d5b8d4\" data-form-controller-form-container-query-value=\"form-fbd53fc0-a20b-4df6-8df7-0fa1e8d5b8d4\"><\/div><p class=\"form-note\">A fulfilment expert will get back to you shortly. <a href=\"\/privacy-policy\/\">Privacy Policy<\/a><\/p><\/div><\/div><\/div><\/section>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-dead-stock\">What is dead stock?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Dead stock is&nbsp;inventory that is no longer sellable and will likely never sell in the future, oftentimes because it\u2019s expired, obsolete, low quality, or out of season. Dead stock, usually stored in the warehouse, only refers&nbsp;to inventory that has never been sold, which excludes returns.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-causes-dead-stock\">What causes dead stock?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">To avoid dead stock, it\u2019s important to understand what causes it to accumulate in the first place. By figuring out what\u2019s contributing to dead stock pile-ups, you\u2019ll be better equipped to move it out and prevent it from piling up in the future. Here are some of the most common causes of dead stock.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-over-ordering\">Over-ordering<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Ordering excess inventory without understanding how much you\u2019ll sell in a given period is the quickest way to accumulate dead stock and increase&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/inventory-carrying-costs\/\">carrying costs<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It can be a challenge to understand just how much&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/inventory-to-sales-ratio\/\">stock<\/a>&nbsp;you need to fulfil future orders. There is a fine line in having excess stock, but by taking the time to implement an&nbsp;<a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-control\/\">inventory control<\/a>&nbsp;system and tracking important&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/distribution-metrics\/\">distribution metrics<\/a>, such as&nbsp;<a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/inventory-turnover-ratio\/\">inventory turnover ratio<\/a>, you can make better decisions on&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/restocking-inventory\/\">inventory restocking<\/a>, on what is a good order quantity number before making a purchase, and when to purchase it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another way retail businesses can avoid over-ordering is by buying less stock more often.&nbsp;For instance, you can reduce the risk of accumulating dead stock by purchasing inventory to meet a month\u2019s demand, rather than the whole year\u2019s.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"1050\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/12\/37c5c485a1e76601c8eb93fccda73923-scaled.jpg?w=854\" alt=\"\" class=\"wp-image-18205\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-inaccurate-demand-forecasting\">Inaccurate demand forecasting<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Miscalculating future demand happens when the right data isn\u2019t being tracked. This causes ecommerce businesses to be misinformed on what products are in demand and how quickly they will sell. By pulling accurate historical order data, you can better&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/demand-forecasting\/\">forecast demand<\/a>&nbsp;instead of buying slow-moving products that consume valuable warehouse space and your bottom line. With accurate demand forecasting, you can make informed decisions on how much inventory to purchase to fulfil future orders.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"369\" width=\"700\" src=\"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/f68eb347514fe4c687409f5220cbd222.jpg?w=1280\" alt=\"\" class=\"wp-image-20112\" srcset=\"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/f68eb347514fe4c687409f5220cbd222.jpg?w=8924 8924w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/f68eb347514fe4c687409f5220cbd222.jpg?w=160 160w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/f68eb347514fe4c687409f5220cbd222.jpg?w=400 400w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/f68eb347514fe4c687409f5220cbd222.jpg?w=768 768w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/f68eb347514fe4c687409f5220cbd222.jpg?w=700 700w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/f68eb347514fe4c687409f5220cbd222.jpg?w=1536 1536w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/f68eb347514fe4c687409f5220cbd222.jpg?w=2048 2048w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/f68eb347514fe4c687409f5220cbd222.jpg?w=1280 1280w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/f68eb347514fe4c687409f5220cbd222.jpg?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-poor-sales-or-marketing-efforts\">Poor sales or marketing efforts<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If you\u2019re selling a&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/high-demand-products\/\">high-demand product<\/a>, yet inventory isn\u2019t moving out as quickly as you\u2019d hope, there\u2019s a high chance that it could be a lack of marketing and sales efforts; this is a big opportunity cost. Poor communication between you and your marketing and sales team on how to sell products, product messaging that misses the mark, poor web experience, and low customer awareness can all lead to high-quality, high-demand products to be left unsold.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"467\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/3ae5972638105dda1d41f26f67266196-scaled.jpg?w=1280\" alt=\"\" class=\"wp-image-11234\" srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/3ae5972638105dda1d41f26f67266196-scaled.jpg?w=2560 2560w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/3ae5972638105dda1d41f26f67266196-scaled.jpg?w=400 400w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/3ae5972638105dda1d41f26f67266196-scaled.jpg?w=700 700w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/3ae5972638105dda1d41f26f67266196-scaled.jpg?w=768 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/3ae5972638105dda1d41f26f67266196-scaled.jpg?w=1536 1536w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/3ae5972638105dda1d41f26f67266196-scaled.jpg?w=2048 2048w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/3ae5972638105dda1d41f26f67266196-scaled.jpg?w=1280 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/3ae5972638105dda1d41f26f67266196-scaled.jpg?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-lack-of-quality-control-defective-products\">Lack of quality control = defective products<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Even if inventory is new, it doesn\u2019t mean it\u2019s of high quality. Defective products are usually returned to the seller, and cannot be resold to another consumer, meaning they\u2019ll sit on shelves forever unless you find a different way to move them out of your warehouse.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/09\/3PL-packing.jpg?w=1280\" alt=\"\" class=\"wp-image-23535\" style=\"width:800px;height:auto\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Backorders<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A business can run out of a particular SKU in its inventory before all orders for that item have been fulfilled. That item is then put on backorder, meaning it will be delivered to the customers that ordered it once it is back in stock.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once you realize you have backorders to fill, it can be tempting to panic and order more of the item than you actually need to resolve the issue. After the backorders are filled, you\u2019ll be left with excess inventory that could be difficult to sell (or a customer gets fed up after having to wait for so long).&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"467\" width=\"700\" src=\"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/d429db4be6536e8879ce85d4b56c7eda.jpg?w=1280\" alt=\"\" class=\"wp-image-20132\" srcset=\"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/d429db4be6536e8879ce85d4b56c7eda.jpg?w=5472 5472w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/d429db4be6536e8879ce85d4b56c7eda.jpg?w=160 160w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/d429db4be6536e8879ce85d4b56c7eda.jpg?w=400 400w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/d429db4be6536e8879ce85d4b56c7eda.jpg?w=768 768w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/d429db4be6536e8879ce85d4b56c7eda.jpg?w=700 700w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/d429db4be6536e8879ce85d4b56c7eda.jpg?w=1536 1536w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/d429db4be6536e8879ce85d4b56c7eda.jpg?w=2048 2048w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/d429db4be6536e8879ce85d4b56c7eda.jpg?w=1280 1280w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2025\/05\/d429db4be6536e8879ce85d4b56c7eda.jpg?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Order cancellations<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Canceled orders aren\u2019t just lost revenue \u2014 they also prevent you from moving products through your supply chain and out the door. Regardless of why a customer cancels their order, your business will be left holding any inventory that you fail to sell. This can easily lead to dead stock, especially if the canceled order contained perishable or out-of-season items.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img decoding=\"async\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2018\/05\/iStock-950831674.jpg?w=1280\" alt=\"\" class=\"wp-image-7524\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Long lead times<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Trends change quickly, so it can be difficult to ensure you have what customers want, <em>when<\/em> they want it. If lead times are long, in the time it takes inventory from your supplier to arrive at your warehouse, demand for that inventory could already have subsided. As a result, lengthy transit times can easily leave you stuck with freight shipments of inventory that no consumer wants to buy anymore.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"380\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/11\/df6a429820ce2bfbb720ef523b497409-scaled.jpg?w=1280\" alt=\"\" class=\"wp-image-17371\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-why-is-dead-stock-bad-for-your-business\">Why is dead stock bad for your business?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Just by sitting on a&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/warehouse-rack\/\">warehouse rack<\/a>, dead stock sucks your business\u2019s profit and hurts your bottom line. Here are a few subtle ways that dead stock costs companies money.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-unsold-inventory\">Unsold inventory<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Dead stock was initially inventory purchased with the intent to sell it. So if a business is not selling products it\u2019s already invested in, it\u2019s failing to make a profit on that investment \u2014 or, at the very least, failing to recoup the cost.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-higher-inventory-storage-fees\">Higher inventory storage fees<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">While\u00a0<a href=\"https:\/\/www.shipbob.com\/warehouse-operations\/inventory-storage\/\">inventory storage<\/a>\u00a0costs come in many forms,\u00a0the outcome is always the same: the more inventory you have, the more it will cost to store it. Dead stock takes up valuable space that could house more popular, newer products. It\u2019s always important to do an\u00a0<a href=\"https:\/\/www.shipbob.com\/blog\/inventory-audit\/\">inventory audit<\/a>\u00a0and act quickly to remove inventory that is unsellable or unlikely to sell.\u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-lower-profit-margins\">Lower profit margins<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Dead stock chips away at profit and can make a sizeable impact if it sticks around long enough. The increased time and effort it takes to market dead stock, the sunk cost of purchasing stock from the manufacturer, and higher inventory costs all shrink a business\u2019s profit margin.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Increased employee costs<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The more inventory you have, the more billable employee hours it will take to sort, move, and organise it. A business has to pay its employees for the time it takes workers to identify dead stock and physically get rid of it \u2014 so if you accumulate dead stock consistently, your employee costs could increase significantly.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There is also an opportunity cost to dead stock, as the time your employees devote to managing dead stock could be allocated to activities that drive revenue.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Reduced inventory space<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">With dead stock taking up space on your shelves, your business has less room to stock items that customers do want. For example, if your business can only store and sell 75 units of a particular product due to crowded shelves, but customer demand could have produced 100 orders, then dead stock has caused you to miss out on 25 orders\u2019 worth of revenue.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"385\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/e01c1d89d29062666346bc827e07b112-scaled.jpg?w=1280\" alt=\"\" class=\"wp-image-11160\" srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/e01c1d89d29062666346bc827e07b112-scaled.jpg?w=2560 2560w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/e01c1d89d29062666346bc827e07b112-scaled.jpg?w=400 400w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/e01c1d89d29062666346bc827e07b112-scaled.jpg?w=700 700w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/e01c1d89d29062666346bc827e07b112-scaled.jpg?w=768 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/e01c1d89d29062666346bc827e07b112-scaled.jpg?w=1536 1536w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/e01c1d89d29062666346bc827e07b112-scaled.jpg?w=2048 2048w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/e01c1d89d29062666346bc827e07b112-scaled.jpg?w=1280 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/e01c1d89d29062666346bc827e07b112-scaled.jpg?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"cost-dead-stock\">How to calculate the cost of dead stock<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Calculating precisely how much dead stock has cost you is not as easy as you might think, but it comes down to figuring out the money lost from the inventory that you cannot sell. Here are a few different approaches to getting a dead stock calculation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Dead stock value<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">First, you can calculate the value of dead stock as you would calculate the value of sellable inventory using this formula:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Dead stock value = Total units in stock x Unit price<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">For example, if you had 50 units of dead stock, and each piece of dead stock would have been sold at $10, then you would calculate the value like so:&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Dead stock value = 50 units x $10 per unit<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Dead stock value = $500<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Dead stock sunk cost<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">You can also calculate how much it cost you to acquire the dead stock in the first place. This amount is considered a sunk cost, as you will not earn or recoup any of your initial investment in the dead stock from sales.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There is no one formula to calculate the sunk cost of dead stock, as different companies incur different kinds of costs when acquiring inventory.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To calculate sunk cost for your inventory, add together all direct costs incurred to create the dead stock, such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Raw materials&nbsp;<\/li>\n\n\n\n<li>Labor costs&nbsp;<\/li>\n\n\n\n<li>Any overhead allocated to the dead stock&nbsp;<\/li>\n\n\n\n<li>Transportation costs to move the product<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Dead stock profit &amp; opportunity cost<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Dead stock not only costs money to obtain, but also costs you the profit from its sale that you were counting on.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To calculate the opportunity cost of profit from your dead stock, use this formula:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Missed Profit = (Total dead stock units x Price per unit) \u2014 Sunk cost<\/strong><\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">For example, if your business invested in 50 units of what is now dead stock, each of which cost you $6 to make, and you planned to sell each unit for $10, you would calculate missed profit like so:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Missed Profit = (50 units x $10 per unit) \u2014 (50 units x $6 each to make)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Missed Profit = $500 \u2014 $300&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Missed Profit = $200<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-7-ways-to-profitably-get-rid-of-dead-stock\">7 ways to profitably get rid of dead stock<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Offloading dead stock can seem challenging, but there are plenty of ways to get rid of dead stock that are both practical and lucrative. Resurrect the value of your dead stock and make room for new inventory using the following best practices.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-put-dead-items-on-sale\">1. Put dead items on sale<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Dead stock presents a unique opportunity to appeal to bargain shoppers. Hold clearance sales or create a discount section of your store where you offer dead stock for a lower price.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-offer-them-as-a-free-gift\">2. Offer them as a free gift<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Delight customers and enhance the&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/unboxing-experience\/\">unboxing experience<\/a>&nbsp;by offering dead stock as a freebie. It\u2019s a great way to boost customer satisfaction and incentivize them to purchase from your business in the future. The gesture means everything, and if you can move out dead stock while doing it, it\u2019s a win-win.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-donate-them\">3. Donate them<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If all else fails, your business can always&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/givenkind-interview\/\">donate unsellable inventory<\/a>&nbsp;and use it as an&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/inventory-write-off\/\">inventory write-off<\/a>. While it doesn\u2019t offer the immediate payout that other strategies do, charitable donations are an excellent way to give back to communities, and customers often appreciate a business\u2019s humanitarian efforts.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4. Offer product bundles<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.shipbob.com\/blog\/product-bundling\/\">Bundling<\/a> your dead stock with a fast-selling item might help you recoup some of your initial investment \u2014 especially if you offer <a href=\"https:\/\/www.shipbob.com\/blog\/how-to-offer-free-shipping-ecommerce-store\/\">free shipping<\/a> on the bundle.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">5. Try to return them to supplier<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Whether the product batch is defective to the point of being unsellable or in pristine condition, it never hurts to check if you can send it back to the manufacturer or supplier you got it from. While this can be a long shot, it could save you the hassle of offloading the dead stock yourself.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">6. Build brand partnerships<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Even if a SKU is dead for your business, it could be useful to another. Donating or selling sead stock to another company that wants it is a great tool for forging brand partnerships, and could even lead to free or discounted inventory for you down the road.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">7. Open new sales channels<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Try offering your dead stock on a different channel, or market it to a different audience. What isn\u2019t appealing in your online store could catch shoppers\u2019 eyes at a retail location, or vice versa. Consider adding new channels to your business (such as social media stores, B2B, or online marketplaces like Etsy or Amazon) to give you more sales avenues for dead stock, and to help you avoid it in the first place.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"466\" width=\"700\" src=\"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/07\/7bc4a8a95ade0da11e580d4e24ef2ed5.jpg?w=1280\" alt=\"\" class=\"wp-image-8487\" srcset=\"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/07\/7bc4a8a95ade0da11e580d4e24ef2ed5.jpg?w=1280 1280w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/07\/7bc4a8a95ade0da11e580d4e24ef2ed5.jpg?w=160 160w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/07\/7bc4a8a95ade0da11e580d4e24ef2ed5.jpg?w=400 400w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/07\/7bc4a8a95ade0da11e580d4e24ef2ed5.jpg?w=768 768w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/07\/7bc4a8a95ade0da11e580d4e24ef2ed5.jpg?w=700 700w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/07\/7bc4a8a95ade0da11e580d4e24ef2ed5.jpg?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-prevent-and-get-ahead-of-dead-stock\">How to prevent and get ahead of dead stock<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The best way to deal with dead stock is to prevent it from piling up in the first place. Here are a few of the best practices for preventing dead stock accumulation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-accurately-forecast-demand\">Accurately forecast demand<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Demand forecasting helps to predict future sales so you can make better decisions on how much inventory to purchase, as well as future&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/ecommerce-warehousing\/\">warehousing<\/a>&nbsp;needs, when to&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/how-to-run-an-e-commerce-flash-sale\/\">run a&nbsp;flash sale<\/a>, and creating an effective&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/ecommerce-pricing-strategies\/\">pricing strategy<\/a>.&nbsp;If you store your inventory with a&nbsp;<a href=\"https:\/\/www.shipbob.com\/3pl\/\">third-party logistics<\/a>&nbsp;(3PL) company like ShipBob, you can get insights into future demand with ShipBob\u2019s&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/new-free-analytics-reporting-tool\/\">analytics and reporting tool<\/a>&nbsp;that provides answers to questions such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>How quickly products are selling<\/li>\n\n\n\n<li>Which items are slow-moving<\/li>\n\n\n\n<li>How many days of inventory you have until you are expected to run out (based on SKU velocity)<\/li>\n\n\n\n<li>Daily order status and performance<\/li>\n\n\n\n<li>How your current demand compares to previous time periods<\/li>\n\n\n\n<li>How your sales are affected by different seasons and months<\/li>\n\n\n\n<li>And much more<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2021\/04\/soldshipped-1.png?w=1280px\" alt=\"\" class=\"wp-image-7717\" data-responsive-img srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2021\/04\/soldshipped-1.png?w=700px 650w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2021\/04\/soldshipped-1.png?w=860px 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2021\/04\/soldshipped-1.png?w=1180px 1080w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2021\/04\/soldshipped-1.png?w=1400px 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2021\/04\/soldshipped-1.png?w=1600px 1440w\" fetchpriority=\"low\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-set-reorder-points-and-safety-stock\">Set reorder points and safety stock<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Reorder quantity refers to the total number of product units you request from a manufacturer or supplier on an\u00a0<a href=\"https:\/\/www.shipbob.com\/blog\/inventory-replenishment\">inventory replenishment<\/a>\u00a0purchase order. The exact amount should not be so high that you have too much capital tied up in inventory and risk accumulating dead stock. But you also want to make sure that you have enough\u00a0<a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/safety-stock\/\">safety stock<\/a>\u00a0and you\u2019re not at risk of selling out before you can get the next batch of inventory.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"211\" width=\"700\" src=\"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=1140\" alt=\"\" class=\"wp-image-9709\" srcset=\"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=1140 1140w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=160 160w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=400 400w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=768 768w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=700 700w, https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">With ShipBob, you can easily check&nbsp;<a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-tracking\/\">inventory counts<\/a>&nbsp;at each fulfilment centre and&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/reorder-quantity-formula\/\">set reorder points<\/a>&nbsp;at the SKU level, so you are notified when stock is running low.&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><em>\u201cShipBob\u2019s analytics tool is also really cool. It helps us a lot with planning inventory reorders, seeing when SKUs are going to run out, and we can even set up email notifications so that we\u2019re alerted when a SKU has less than a certain quantity left. There is a lot of value in their technology.\u201d<\/em>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Oded Harth, CEO &amp; Co-Founder of&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/mdacne\/\">MDacne<\/a><\/p>\n<\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-upgrade-your-inventory-management-software\">Upgrade your inventory management software<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Choosing an&nbsp;<a href=\"https:\/\/www.shipbob.com\/inventory-management\/software\/\">inventory management software<\/a>&nbsp;that\u2019s intuitive and easy to use is absolutely crucial. ShipBob\u2019s&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/order-fulfillment\/\">order fulfilment<\/a>&nbsp;solution offers built-in inventory management tools, data, and reporting that&nbsp;offers insights into demand forecasting,&nbsp;<a href=\"https:\/\/www.shipbob.com\/blog\/order-management\/\">order management<\/a>, and more to help you make better decisions on how to manage your inventory.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"534\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-e1745013450265.png?w=1080\" alt=\"\" class=\"wp-image-19916\" srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-e1745013450265.png?w=1080 1080w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-e1745013450265.png?w=160 160w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-e1745013450265.png?w=400 400w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-e1745013450265.png?w=768 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-e1745013450265.png?w=700 700w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-e1745013450265.png?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Partner with ShipBob to reduce dead stock<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Offloading dead stock quickly and finding ways to avoid it is critical to the long-term profitability of your business. To prevent dead stock, proactivity is key \u2014 taking time now to put an inventory management process in place will help your business save money, meet customer demand, and <a href=\"https:\/\/www.shipbob.com\/blog\/supply-chain-optimization\/\">optimise your supply chain<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">ShipBob\u2019s dashboard comes with inventory management capabilities that help you keep track of your inventory at all times, and keep fulfilment running smoothly. Using ShipBob\u2019s technology, you can:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Monitor inventory levels at any of our dozens of fulfilment centres.<\/li>\n\n\n\n<li>Set up automatic reorder notifications to time replenishment perfectly.<\/li>\n\n\n\n<li>Track valuable sales data over time and forecast demand more accurately, so that you can avoid dead stock whenever possible.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">To learn more about ShipBob, click the button below to request pricing and learn more about what we offer.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"ShipBob Fulfillment Center Guided Tour - 3D 360\u00b0 VR Video\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/YdTbM4XlizY?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-3e41869c wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.shipbob.com\/quote\/\">Request Fulfilment Pricing<\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Dead stock FAQs<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Dead stock is a surefire way to cut into profit margins. Here are answers to some of the most frequently asked questions about dead stock so you know how to manage it and prevent it from piling up.<\/p>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"false\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">Why is it called dead stock?<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\" \/><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n\n<p class=\"wp-block-paragraph\">Dead stock refers to ecommerce inventory that isn\u2019t selling now and likely won\u2019t sell in the future. Because demand for these products has dwindled (e.g., low quality, a dip in demand, seasonality), they have no more vitality in the market and therefore cuts into profit margins.<\/p>\n\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"false\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">What happens to dead stock?<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\" \/><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n\n<p class=\"wp-block-paragraph\">Dead stock usually sits unsold in a warehouse or a 3PL\u2019s fulfilment centre until it is moved out. While there, it quickly increases carrying costs and can occupy warehousing space needed for new, sellable inventory. When dead stock fails to sell, it can cut into profit margins and impact a company\u2019s bottom line. Dead stock is often due to a change in market demand and it can be considered as an <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-write-off\/\"><span>inventory write off<\/span><\/a><span>.&nbsp;<\/span><\/p>\n\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"false\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">How do I get rid of dead stock?<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\" \/><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n\n<p class=\"wp-block-paragraph\">In offloading dead stock, some options are more profitable than others. There are a few ways to get rid of dead stock, such as bundling a dead stock item with a high-demand product for free, returning it to the manufacturer or supplier, or donating it to a non-profit organisation. It\u2019s important to have a plan in place to remove dead stock from storage as it can quickly increase warehousing costs.<\/p>\n\n<\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>What is dead stock? Dead stock is&nbsp;inventory that is no longer sellable and will likely never sell in the future, oftentimes because it\u2019s expired, obsolete, low quality, or out of season. Dead stock, usually stored in the warehouse, only refers&nbsp;to inventory that has never been sold, which excludes returns. What causes dead stock? To avoid [&hellip;]<\/p>\n","protected":false},"author":149,"featured_media":0,"parent":4522,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"hub.php","meta":{"content-type":"","inline_featured_image":false,"footnotes":""},"class_list":["post-4527","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.8 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What Is Dead Stock? Meaning, Issues, and How to Combat It<\/title>\n<meta name=\"description\" content=\"Dead stock can quickly pile up and cut into profit margins. Learn more about what causes dead stock and how to prevent it from accumulating.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.shipbob.com\/au\/inventory-kpis\/dead-stock\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dead Stock\" \/>\n<meta property=\"og:description\" content=\"Dead stock can quickly pile up and cut into profit margins. 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