Dead stock inventory: how to find it and clear it

Dead stock (also called dead inventory, and often obsolete inventory) is stock that has stopped selling and is unlikely to sell at full price again. Below: how to find it, price it and clear it, with four example products you can check by hand.

It is not about “deadstock” in fashion, where the word means unused fabric, unsold garments or never-worn vintage and sneakers. It is not about shares either.

1. What counts as dead stock?

Dead stock is stock that no longer sells at the normal price. The neighbouring terms differ mainly in whether it still sells at all.

• Slow-moving (still sells, slowly): cover is far above your other products. See slow-moving inventory.
• Excess (still sells): a salvageable surplus, which Ryder calls an opportunity rather than a liability.
• Dead stock (no longer sells): no sale for a period you set.
• Obsolete (no longer sells): end of its life, with no buyer. Salsify uses it as a synonym for dead stock; Flowspace says obsolete stock can become dead stock, but not all dead stock is obsolete.

Lightspeed draws the practical line: slow-moving stock “still has a chance to sell”, while obsolete inventory “is unsellable”. From here on, dead stock means stock that has stopped selling at your normal price.

2. When does stock count as dead?

Nobody agrees on the line. Six public guides draw it between three and twelve months without a sale, so you have to set your own.

This guide uses two lines: at risk after 180 days without a sale, and dead after 365. Both sit inside the guides’ ranges. DOSS says most industries treat six to twelve months unsold as dead stock, and Fidelitone says no movement in six months signals risk while roughly a year marks non-seasonal stock as dead.

Count from the later of the last sale and the day the stock arrived, so a new product is never dead. Move the lines per category: Fidelitone notes seasonal stock can be dead within weeks of missing its selling window, so judge it against its season, not the calendar.

3. Find it by valuing every product at cost

For each product, take units on hand × unit cost and the days since its last sale. Cover, units on hand ÷ units sold per day, separates slow-moving from selling: see days of inventory.

Illustrative data.

Total stock is €6,000.00. Cover is units on hand ÷ units sold per day: A has 120 ÷ (60 ÷ 90) = 180 days and B has 80 ÷ (5 ÷ 90) = 1,440 days. B holds €1,200.00, yet it is not dead because it still sells.

Of the €6,000.00, €3,900.00 (65%) sold in the last 90 days. Products C and D hold €2,100.00, which is 35%. Cleverence lists the percentage of inventory value older than 180 days as a figure to track. I’d track it monthly, next to total stock value.

Guides value dead stock in two ways. Flowspace counts what you spent on it, including purchase price, shipping, handling and storage, while Sage multiplies the units by the price they would have sold for (100 × $7 = $700). This guide values stock at cost, and the write-down below uses what it can still fetch.

4. How much dead stock is normal?

None of the guides checked gives an ecommerce benchmark, so use your own share as the benchmark and watch it fall. The only survey with a spread of answers is from Phocas: 46% of 100+ wholesale distributors reported 2 to 10% dead stock.

Sage says to aim for an annual average of 5 to 10% without citing a source for that range, and other guides quote shares up to 30% with none. The definitions differ, so compare nothing until you count the same way every month: stock value with no sale for 180 days or more, divided by total stock value. In the example, C alone is 22.5% and C with D is 35%.

5. The cost of holding it

Holding cost per year = stock value at cost × carrying cost rate. The rate covers warehouse space and handling, insurance, and the capital that could have gone to faster-selling products, according to Cleverence.

Cleverence says many teams use a rule of thumb of 20 to 30 percent a year, though your own rate may vary. This guide assumes 25% as an input, not a benchmark. Build your own from what you pay: interest on the money tied up, storage per unit and insurance.

At 25%, product C costs 25% × €1,350.00 = €337.50 a year to keep and product D costs €187.50. Together that is €525.00 a year, or €131.25 a quarter.

Every quarter spent deciding adds another €131.25 in the example. If demand will not return, a sale at any price above zero net beats holding the unit another year.

6. Dead stock can still eat your ad budget

A product can keep winning paid clicks while it sells nothing, and every click is paid for.

For the last 90 days, assume every sale came from the ads. Contribution profit per unit is the price excl. VAT minus unit cost minus €6.00 of order costs (shipping, packing, payment fees), so A earns €45.00 − €22.50 − €6.00 = €16.50 a unit. POAS is contribution profit ÷ ad spend, and 1.0 is break-even: see POAS vs ROAS.

Prices excl. VAT are €45.00 (A), €30.00 (B), €50.00 (C) and €20.00 (D).

Products C and D took €525.00 of the €1,375.00 spend, 38.2%, and returned nothing. At its current rate, C’s clicks cost 4 × €405.00 = €1,620.00 a year, 4.8 times its €337.50 holding cost. The break-even ROAS calculator gives the floor for any product.

Google’s help pages say custom labels let you “subdivide products in your campaign based on criteria you define”, and Merchant Center names clearance as an example. Put dead stock behind a label such as clearance and give that group lower priority. Labels can take up to 24 to 48 hours to appear in Google Ads. More on the feed side in optimise Google Shopping ads.

7. Find out why it stopped selling

Before you lower spend, find the cause, because the exits differ. A product nobody sees needs exposure, while one many click but few buy needs less spend. Product C is the second kind.

8. What should you do with dead stock?

Pick the exit that nets the most per unit by your deadline. Net per unit = selling price − order costs − ad cost per sale. Compare it with holding: cost × carrying rate for every year you wait. To see the margin a clearance price leaves, enter the cost and the new price in the margin calculator.

Take product C: 45 units, €30.00 cost, €50.00 regular price. Clearing at €30.00 nets €30.00 − €6.00 = €24.00 a unit, €1,080.00 in total, if all 45 sell. At €22.00 it nets €16.00 (€720.00). A bulk buyer paying an assumed €8.00 with no order costs nets €8.00 (€360.00).

The ad cost per clearance sale has a ceiling. At €22.00 the shop nets €16.00 before ads and the bulk buyer €8.00, so you can pay at most €16.00 − €8.00 = €8.00 in ads per sale before bulk is the better exit.

Holding C costs 25% × €30.00 = €7.50 a unit a year and recovers nothing, so hold only if you expect demand to return.

• A (selling): reorder from cover and lead time: see reorder point and lead time.
• B (slow-moving): stop buying. Its POAS of 0.18 says to lower its priority; try a bundle with A.
• C (dead): clear at €22.00 with a deadline, then sell what is left in bulk. Lower its priority outside the clearance group.
• D (at risk): check it is visible and when its season is. Review at 365 days, and lower its priority meanwhile.

9. Can you write dead stock down or off?

Write down stock whose net recovery is below its cost. IAS 2 says inventories are measured “at the lower of cost and net realisable value”, which is the estimated selling price less the estimated costs necessary to make the sale.

For product C: €22.00 − €6.00 = €16.00 net realisable value against €30.00 cost. The write-down is €14.00 × 45 = €630.00, and the carrying amount falls from €1,350.00 to €720.00.

Tax is a separate question. In the US, IRS Publication 538 (January 2022) says goods that cannot be sold should be valued “at their bona fide selling price minus direct cost of disposition”, the same logic as net realisable value.

10. The five-step check

Do it per category if your lines differ. A spreadsheet is enough for a few hundred products.

11. Where Product Metrics fits

Inventory Insights shows each slow product with the reason it is slow, from exposure, product age, seasonality, stock quantity and value, and expected demand. A product nobody sees needs exposure; one everyone clicks but few buy needs less spend. Product C is the second kind.

Stock cover also feeds Product Score and lands in Merchant Center as a custom label: see Product Segmentation. On the Inventory Insights page, a fleece crew with 1,520 units, 38 weeks of cover, 2,960 clicks and a POAS of 0.80 against 2.00 goes from medium to low priority, to free the capital instead of buying more clicks. You decide; Product Metrics never acts for you.

Sources

• DOSS, Dead Stock: How to Identify, Prevent, and Liquidate, 1 April 2026.
• Lightspeed, What Is Obsolete Inventory?, 17 December 2025.
• Cleverence, What is dead inventory? and Dead inventory: causes, costs and how to fix it.
• Alexander Jarvis, Inventory aging in ecommerce.
• Fidelitone, What is dead stock?, updated 6 March 2026.
• Phocas, What is dead stock and how to eliminate it: survey of 100+ wholesale distributors.
• Sage, What is dead stock inventory and how do you avoid it?, updated 9 July 2026.
• Flowspace, Dead stock, updated 7 May 2026.
• ChannelEngine, Strategies to reduce dead stock.
• IRS, Publication 538, January 2022.
• Ryder, Dead stock: what it means and how to prevent it.
• Salsify, Obsolete inventory.
• Glossy, Why deadstock isn’t the redheaded stepchild of fashion anymore, 3 April 2017: fashion deadstock is “unused fabric that accumulates in the corners of factories and unsold products”.
• IFRS Foundation, IAS 2 Inventories.
• Google Ads Help, Use custom labels for Shopping ads, and Google Merchant Center Help, Custom label 0–4 and Sale price.

Start with one export

Export your products with their last sale dates and total the value older than 180 days. That one share tells you whether dead stock is worth a week of work.