Dead stock rarely starts as a bad decision. It's the extra 500 units you ordered to hit a supplier's minimum, the colorway that didn't catch on, the holiday set that arrived a week late. On its own, each one is a small miss. The problem is that nobody decides to keep it. It just stays, month after month, taking up shelf space and cash, until someone finally asks why the storage bill keeps growing.
Dead stock is inventory that has stopped selling and isn't expected to sell at its normal price. Rather than a fixed age, define it by days of supply: units on hand divided by average daily sales. A SKU with more than a year of supply, or no sales in 180 days, deserves a decision. Holding it costs storage, tied-up cash, insurance and gradual loss of value, often estimated at 20% to 30% of its value per year. Clear it by bundling, discounting, selling to off-price buyers or liquidators, or donating, roughly in that order of recovered value.
Define It for Your Own Catalog
You'll see definitions like "anything that hasn't sold in 90 days." A fixed age is a reasonable starting point, but it doesn't suit every product. A winter coat that hasn't sold since March isn't dead in July; it's out of season. A phone case for a discontinued phone model is dead even if it sold a few units last month.
A more useful measure is days of supply:
For seasonal products, compare against the same season last year rather than the last 90 days.
How to Find It
Export a report with every SKU, units on hand and units sold over the last 90, 180 and 365 days. Most store platforms and inventory tools can produce this. Add columns for days of supply and for inventory value at cost. Then sort by value, not by units. The SKU with 2,000 units of a $1 sticker matters less than the one with 300 units of a $40 product.
You'll usually find that a small number of SKUs account for most of the value sitting still. Those are the ones to act on first. Our dead stock audit template sets this up for you.
What It Costs to Keep
Holding inventory has four kinds of cost:
- Storage: the rent, or the 3PL or FBA fees, for the space it takes.
- Capital: the cash tied up in it, which could be paying for bestsellers or marketing. Use your cost of borrowing, or the return you'd expect elsewhere.
- Insurance and handling: covering it, counting it, moving it out of the way.
- Value loss: products age, packaging yellows, trends pass, expiry dates approach. The longer it sits, the less it's worth when you finally sell it.
Together, these are often estimated at 20% to 30% of the inventory's value per year, though it varies widely by product and storage cost. A worked example, with the assumptions spelled out:
| Cost | Assumption | Per year |
|---|---|---|
| Stock at cost | 600 units × $25 | $15,000 held |
| Storage | 4 pallets × $25/month | $1,200 |
| Cost of capital | 10% of $15,000 | $1,500 |
| Insurance and handling | 2% of $15,000 | $300 |
| Value loss | 8% a year as it ages | $1,200 |
| Total | About 28% of its value | $4,200 |
That's $350 a month to keep product that isn't selling. If a liquidator offered 30 cents on the dollar ($4,500) today, most brands would hesitate. But holding it another year costs $4,200 and it'll be worth less at the end. Taken that way, the offer looks different.
Why It Builds Up
Suppliers want 1,000 units, you need 300. The other 700 become a problem unless you plan to sell through them.
Every size and color multiplies SKUs. The least popular variants sell slowly and pile up while the popular ones stock out.
Holiday sets and seasonal products that didn't sell through in their window, now waiting a year for the next one.
New packaging, reformulations or updated versions that make the old stock harder to sell alongside the new.
Ways to Clear It, Most Value First
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Bundle it with a bestseller
Pair a slow item with something that sells, as a gift or a set at a small premium. You recover close to full value and give customers a reason to buy both.
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Offer it to existing customers first
An email or loyalty offer to past buyers usually clears stock at a better price than a public sale, without training everyone to wait for discounts.
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Use it as a gift with purchase
A free item above a spending threshold can lift average order value enough to justify the cost of the product you're giving away.
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Sell to off-price buyers or on a different channel
Discount retailers, marketplaces you don't normally use, or wholesale accounts can take larger quantities at a lower price.
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Liquidate
Liquidators pay a fraction of cost, but they take everything at once and free up space and cash immediately.
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Donate or recycle
Donating can bring a tax benefit and goodwill, and it's better than paying to dispose of product. Ask your accountant how donated inventory is treated for your business.
Set a deadline. Stock that's "being dealt with" for six months is still dead stock. Decide the route and the date, then stick to it.
Dead Stock at Amazon Costs More
Slow inventory in FBA is especially expensive. Amazon charges higher storage rates in Q4, adds aged inventory surcharges once units have been in stock beyond certain thresholds, and limits how much inventory you can hold overall. Slow stock can crowd out capacity you need for products that do sell.
If a SKU is slowing down in FBA, act early: create a removal order to bring it back to your 3PL, where storage usually costs less and the units can be sold through other channels, or dispose of it if it isn't worth the removal fee. Keeping only fast movers in FBA and holding backstock elsewhere avoids most of the problem. Our FBA vs FBM guide covers how to split a catalog.
Keeping It From Coming Back
- Review days of supply for every SKU once a month, not once a year.
- Order smaller first runs of new products, even at a higher unit cost, until demand is proven.
- Negotiate lower minimums or split orders with your supplier across colors or sizes.
- Plan the exit for seasonal products before they arrive: what gets discounted, when, and where leftovers go.
- Retire slow variants deliberately instead of letting them drift.
Frequently Asked Questions
Dead stock is inventory that has stopped selling and isn't expected to sell at its normal price. It's often defined as stock with no sales in 90 to 180 days, but days of supply (units on hand divided by average daily sales) is a more reliable measure across different products.
Divide units on hand by the average number of units sold per day over a recent period, usually the last 90 days. For seasonal products, use sales from the same season last year.
Holding costs include storage, the cost of capital tied up in the inventory, insurance and handling, and the gradual loss of value as products age. These are often estimated at 20% to 30% of the inventory's value per year, but calculate your own based on your storage costs and products.
Start with options that recover the most value: bundling with bestsellers, offers to existing customers, and gift-with-purchase promotions. Then try off-price channels, liquidation, and finally donation or recycling. Set a deadline for each SKU.
Often, yes. FBA charges higher storage rates in Q4 and surcharges on aged inventory. Removing slow units to a 3PL, where storage usually costs less and the stock can be sold through other channels, is frequently cheaper than leaving them at Amazon.
Review days of supply monthly, order smaller first runs of new products, negotiate lower minimums, plan what happens to seasonal leftovers before they arrive, and retire slow variants deliberately.
Paying to store stock that isn't moving?
We'll help you see which SKUs are sitting, and set your storage up so slow movers don't take the space your bestsellers need. Tell us your SKU count and how much you're holding.