Dead stock refers to inventory that has remained unsold for an extended period—typically 6-12 months—and shows no signs of selling at current prices. This inventory ties up capital, incurs storage costs, and may depreciate in value due to changing trends or product aging.
Dead stock can result from over-ordering, poor demand forecasting, changing fashion trends, quality issues, or ineffective merchandising. The longer inventory sits, the more it costs the business in carrying expenses and opportunity cost of the capital deployed.
Managing dead stock typically involves progressively deeper discounts, bundling with popular items, donating for tax benefits, or selling to liquidators. Analyzing what products become dead stock helps brands improve future purchasing decisions and product development.