Warehouse Dispatch

Warehouse Efficiency: Dealing With Dead Stock

Posted by Reid Curley on Aug 15, 2017 7:00:00 AM

dead stockWhat happens when a corner of your warehouse is dedicated to housing stock that isn't going anywhere? The term dead stock is used to refer to products that have not sold in over a year, literally taking up space in your warehouse with no promise of return. There are several ways to approach dead stock items to free up your funds and your real estate.

Return Them

Depending on agreements with your vendors, you may be able to return unsold stock within a certain period of time after you placed the order. This is often the case if an order is placed for items only to reveal that those items are dead on arrival. Unfortunately, many companies don't realize they have dead stock until long after the order has arrived, so returning the items may not be an option.

Discount Them

The next best option is to discount the items to a point where they will sell, even if it only means breaking even for you. It is extremely important to remember that holding out for those products to sell in the future could be costing you valuable shelf space where you could be stocking currently trending items. There is a clear tradeoff here in terms of warehouse efficiency. If selling the items at a discounted rate gets them off your books and opens up greater opportunities, it is worth making the deal. In some cases, the best way to discount items is not marking them down, but rather bundling them with other related products. Few people will turn down a deal where they get something extra as a bonus. This makes the sale of these products not reliant upon the product itself, which is clearly not working, but reliant on outside factors that may be more favorable.

Donate Them

If all else fails, a donation may be in order. Again, if opening up the shelf space will offer a large boost in warehouse efficiency, it is worth donating the items. You can donate them at the original cost, so you won't be underwater, and write off the donation at the end of the year. Is it ideal? No, but it's better than sitting on these products waiting for them to move against the market trends, especially if they're preventing you from bringing in more valuable stock in the mean time.

For many companies, dealing with dead stock is a challenge. In fact, some companies do not even have proper warehouse efficiency procedures in place to assess whether they have dead stock on hand or not. If you have never taken a trip through your warehouse in search of dead stock, there is no time like the present. Once it's out of the way, you can begin working on warehouse efficiency policies that will help prevent dead stock from building up in the future.

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Topics: warehouse efficiency

Reid Curley

Written by Reid Curley

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