Dead stock and excess inventory: find it, age it, clear it
How to define and measure dead and excess stock, use aging buckets, cancel surplus purchase orders, and clear slow stock without training customers to wait for discounts.
Stokrio Team · · 6 min read
Every brand has some stock that isn't moving. The problem isn't that it exists — some is the unavoidable cost of trying new products — it's that it sits there unmeasured, quietly holding cash and shelf space, while you worry about running out of your best sellers. This guide covers how to find it, how to classify it, and how to clear it without damaging your margin or your brand.
Key takeaways
- Dead stock is stock on hand with no sales in a set window (90 days is a sensible default). Excess stock is stock beyond what you expect to sell over lead time, review period and safety buffer.
- Measure excess including stock on order. The cheapest excess to fix is the purchase order you haven't received yet.
- Aging buckets show how long stock has been sitting and which money is most at risk.
- What you paid is a sunk cost. The clearance decision is about future cash: what each option brings in, net of fees and storage.
- Clear stock in ways that don't teach your best customers to wait for a sale.
Definitions that hold up
Dead stock
dead = on hand > 0 AND no sales in the last N daysNinety days works for most consumer products. Shorten it for fast-moving categories and lengthen it for slow, high-value lines like furniture. Exclude products launched within the window — a product received last month can't have 90 days without sales.
Excess stock
Excess is a forward-looking measure. It compares what you have and what's coming against what you expect to need:
excess units = on hand + on order − forecast demand over (lead time + review period + safety days)Example: a product has 900 on hand and 300 on an open purchase order. It's forecast to sell 10 a day. The supplier lead time is 30 days, you review orders every 14 days, and you keep 16 days of safety buffer.
- Coverage needed: 30 + 14 + 16 = 60 days.
- Forecast demand over that horizon: 60 × 10 = 600 units.
- Excess: 900 + 300 − 600 = 600 units.
- At a unit cost of $8, that's 600 × $8 = $4,800 of cash beyond what the product needs.
Notice that 300 of those 600 excess units haven't arrived yet. That's the first thing to fix.
Cancel or defer surplus purchase orders first
Before you discount anything, check open purchase orders for products that are already in excess. Asking a supplier to push a delivery back by a month, reduce a quantity, or swap it for a faster-moving product costs nothing compared with marking down stock later. Suppliers are generally more flexible before production starts than after it ships, so this check belongs in your weekly purchasing routine, not your quarterly clean-up.
In the example above, cancelling or deferring the 300-unit order halves the excess immediately, leaving 300 units — about 30 days of extra sales — which will work itself out without a markdown.
Aging buckets
Aging tells you how long stock has been sitting since it was received. Assuming you ship oldest stock first, the oldest units are the ones not yet sold from earlier receipts. Common buckets:
| Age since receipt | What it usually means | Action |
|---|---|---|
| 0–90 days | Normal | None |
| 91–180 days | Slowing | Check forecast and open POs |
| 181–365 days | At risk | Plan clearance |
| Over 365 days | Stale | Clear, liquidate or write off |
Report aging in value at cost as well as units. A single pallet of a $60 product in the over-365 bucket matters more than a box of $2 accessories. Watch the trend too: if the 181–365 bucket grows month after month, your buying is ahead of your selling, and clearance alone won't fix it.
For products with expiry dates, aging is not optional. Stock that expires has a hard deadline, so the clearance decision needs to be made well before the date, not in its final weeks.
The clearance decision is about future cash
The most common mistake is anchoring on what the stock cost. That money is spent whatever you do. The useful question is: which option brings in the most cash from here, after selling costs and storage?
Worked example: 400 units of a product with no sales in 120 days. Cost was $12 a unit; normal price is $40. Assume storage costs $0.50 per unit per month and each online order costs $6 in fees, pick-pack and shipping you pay.
Option A — hold at full price. Recent sales are zero. Expected cash is close to nothing, while storage costs 400 × $0.50 = $200 a month.
Option B — 50% off online. Price $20, minus $6 selling costs = $14 net per unit. Suppose 150 units sell over 60 days: 150 × $14 = $2,100.
Option C — liquidator. An offer of $5 a unit for the lot: 400 × $5 = $2,000, collected now, no further storage.
Option D — combine. Run option B for 60 days, then sell the remaining 250 units to the liquidator: $2,100 + (250 × $5) = $3,350, less two months' storage on the unsold units — at most 2 × $200 = $400 — so roughly $2,950 or better.
Option D wins in this example, but the numbers are what decide it. If the discount had only moved 30 units, liquidating everything on day one would have been better. Set a deadline for each step so clearance doesn't turn into another six months of drift.
Clearing without wrecking your margin
How you clear matters as much as whether you clear. Sitewide discounts teach customers to wait, and they discount your healthy products alongside the dead ones.
- Bundle with a strong seller. Pairing a slow product with an A-class product moves units without a visible markdown on either.
- Use it as a gift with purchase. Above a basket threshold, it lifts order value and gets the stock out.
- Offer it to a segment, not everyone. An email to customers who bought related products, or a loyalty-tier offer, keeps the discount out of your public pricing.
- Use a separate outlet. A clearance collection that's not in your main navigation, or an outlet marketplace, keeps markdowns away from full-price shoppers.
- Sell to wholesale or liquidation. Lower price per unit, but immediate cash and no further handling.
- Donate or write off. When nothing else returns more than the handling cost, donating frees space; talk to your accountant about the tax and write-down treatment where you operate.
Preventing the next batch
Clearance treats the symptom. The cause is almost always buying more than you sell. Things that help:
- Smaller first orders for new products. Pay a higher unit price on a trial quantity rather than a lower price on a year's supply of an unproven product.
- Push back on MOQs. A minimum order quantity that equals eight months of sales is a decision to hold eight months of stock. Negotiate it, or split it into staggered deliveries.
- Use stockout-adjusted, current velocity. Buying from last year's peak, or from an average that includes a viral week, is how excess starts.
- Review excess monthly and open POs weekly. The earlier you see it, the cheaper it is to fix.
- Retire products on purpose. Mark a product as discontinued so it stops generating reorder suggestions, then sell through what's left.
Where Stokrio fits
Stokrio's inventory reports include excess stock (counting stock on order, so surplus purchase orders are visible), dead stock, inventory aging buckets and inventory value trend, with CSV export and scheduled email so the monthly review happens without anyone building a spreadsheet. For products with expiry dates, the lots and expiry radar groups stock into expired, within 30 days, 31–90 days and later.