Question 1

What is dead stock in e-commerce?

Accepted Answer

Dead stock is inventory that hasn't sold in 90-180+ days and is unlikely to sell at full price. It ties up cash, occupies warehouse space, and incurs ongoing holding costs (storage, insurance, capital). For most e-commerce businesses, 10-25% of inventory is dead stock at any time. Identifying and clearing dead stock is critical — every month you hold it costs 2-3% of its value in holding costs alone, while the product continues losing market value.

Question 2

How do I identify dead stock in my Shopify store?

Accepted Answer

In Shopify, go to Products > Inventory and sort by 'days since last sale' or check sales velocity reports. Classify inventory into four tiers: Healthy (sold in last 30 days), Slow-moving (31-90 days since last sale), Dead stock (91-180 days), and Obsolete (180+ days). Products with zero sales in 90+ days and declining page views are your highest-priority dead stock. Focus on cost value, not retail — a SKU with $500 in cost tied up matters more than one with $50.

Question 3

Should I markdown dead stock or write it off?

Accepted Answer

Almost always markdown first. A 40% discount on dead stock still recovers 60% of retail value (often above cost). Write-off recovers $0. The decision tree: 1) Try 20-30% markdown for slow movers. 2) Try 40-50% for dead stock. 3) Bundle with popular items. 4) Liquidate at 10-20% of cost through bulk buyers. 5) Donate for tax write-off (deduct cost basis). Only write off damaged or truly unsellable goods. Every dollar recovered is a dollar you can reinvest in products that actually sell.

Question 4

How much does dead stock really cost?

Accepted Answer

Dead stock costs far more than just the purchase price. Monthly holding costs run 2-3% of inventory value (storage, insurance, capital cost). A $30,000 dead stock pile costs $600-900/month just to hold. Over 6 months, that's $3,600-5,400 in holding costs plus 20-30% further value depreciation ($6,000-9,000). Total cost of waiting: $9,600-14,400. Meanwhile, that $30,000 reinvested in fast-moving inventory at 55% margin and 4x turns generates $66,000 in gross profit per year.

Question 5

How do I prevent dead stock from accumulating?

Accepted Answer

Five strategies: 1) Set reorder points based on actual velocity, not gut feeling. 2) Order smaller quantities more frequently — better to reorder than over-order. 3) Monitor sell-through rate weekly — flag any SKU below 50% sell-through at 60 days. 4) Pre-plan clearance — set automatic markdown triggers (e.g., 20% off at 60 days, 40% at 90 days). 5) Use pre-orders or made-to-order for new/risky products before committing to bulk inventory. Prevention is always cheaper than liquidation.

Tier	% of Value	Value (cost)	Est. SKUs	Monthly Hold	Action
Healthy(< 30 days)	50%	$60,000	125	$1,500Highest	Reorder as needed
Slow-moving(31-90 days)	25%	$30,000	63	$750	Markdown 20%
Dead stock(91-180 days)	15%	$18,000	38	$450	Markdown 40%
Obsolete(180+ days)	10%	$12,000	25	$300	Liquidate at 15%

Dead Stock Identifier

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