What is dead stock in retail?

Dead stock is inventory that has stopped selling and is very unlikely to sell at any reasonable price through normal channels — typically discontinued, obsolete, or so aged it no longer matches demand. It differs from slow-moving stock, which still sells, just below plan. Dead stock's only remaining value is salvage: liquidation, donation, or write-off.

What's the difference between excess inventory and dead stock?

Excess inventory is stock bought or received beyond what current demand supports — it is still sellable, just oversupplied relative to the selling rate. Dead stock has crossed the line into unsellable at any normal price. Excess becomes dead stock when it ages past the point where markdowns, bundling, or off-price channels can move it.

How do you build an inventory aging report?

Bucket every SKU by days since receipt (0-30, 31-60, 61-90, 91-180, 180+), then pull units on hand, cost value, retail value, and weekly sell-through per bucket. Sort by dollars at cost in the oldest buckets first — that ranking, not unit count, tells you where cash and carrying cost are actually stuck.

How do you get rid of dead stock?

Work down a disposal ladder in order of cash recovered: scheduled markdowns first, then bundling with faster sellers, employee or loyalty sales, outlet/off-price channels, a liquidator or jobber, donation for the tax benefit, and write-off last. Each rung recovers less than the one before it, so the goal is to exit as high on the ladder as velocity allows.

What is the carrying cost of excess inventory?

Carrying cost is what it costs to keep unsold stock on the books — capital tied up, storage, insurance, shrinkage, and obsolescence risk — usually estimated as an annual percentage of inventory value at cost, often 15-30% depending on the category. A $50,000 aged position at 20% annual carrying cost is losing roughly $833 a month simply by sitting there.

At what age does inventory become obsolete?

There's no universal cutoff; it depends on category life cycle. Fast fashion can be functionally obsolete at 90 days, while basics or hardware may still sell at 180+ days. The better signal than age alone is age combined with weekly sell-through: stock that is both old and moving at near-zero velocity is the obsolete-risk segment to act on first.

Should aged inventory be donated or liquidated?

Liquidation to a jobber or off-price buyer usually recovers more cash than donation, so it belongs earlier on the disposal ladder. Donation makes sense once liquidation offers are near zero or the tax deduction plus warehouse space freed up outweighs the marginal cash a liquidator would pay — and it avoids the reputational risk of dumping into gray-market channels.

Dead stock and excess inventory

Dead stock is inventory that has stopped selling and is very unlikely to sell again at a reasonable price. Excess, aged, and slow-moving stock are earlier, still-recoverable stages — and the aging report is what tells you which stage each SKU is actually in before it becomes a write-off.

Plan a markdown before it goes dead When to mark down inventory

Slow-moving, excess, aged, and dead stock aren't the same thing

Slow-moving stock is still selling, just below the plan's weekly rate — it needs a velocity fix, not necessarily a disposal decision. Excess inventory is stock bought or received beyond current demand; it's fully sellable, just oversupplied. Aged inventory is stock that has sat past a normal selling window for its category, whether or not it's still moving. Dead stock is the end state: aged, excess stock that has stopped moving and won't sell through any normal channel at a reasonable price.

The practical difference is what each one calls for. Slow-moving stock needs a pace check. Excess needs a channel or a markdown. Aged needs both age and velocity watched together. Dead stock needs to leave the building — the only remaining question is which rung of the disposal ladder recovers the most cash.

Aged inventory calculator

Units of aged stock

Unit cost ($)

Original ticket ($)

Current weekly units sold

Planned clearance discount (%)

Annual carrying cost (% of value)

Inventory value at cost: $5,040.00
Inventory value at ticket: $11,760.00
Weeks of supply at current pace: 30 wks
Monthly carrying cost: $92.40
Cash recovered at planned clearance price: $4,704.00
Loss vs. cost: $336.00

Weeks of supply and monthly carrying cost help decide whether this position can still be markdown-managed or needs to move to a liquidation channel now.

Aging report

Aging buckets and what to check per column

Bucket by days on hand, not just SKU or class. The columns that matter: units, cost value, retail value, and weekly sell-through per bucket — sorted by dollars at cost in the oldest buckets.

Units and cost value

How many units and how much cash is tied up at cost — the number that drives the write-off exposure if this doesn't move.

Retail/ticket value

What it would be worth at full price — useful for comparing against the clearance recovery estimate.

Weekly sell-through

Age alone doesn't mean dead; age combined with near-zero velocity is the real obsolescence signal.

Aging buckets and the action each one calls for

Age bucket	Status	Typical action	What to check
0-30 days	Fresh receipt	Full price	Monitor sell-through only — no action needed.
31-60 days	Should be selling	First planned markdown if behind pace	Compare weekly units to plan; break early if lagging.
61-90 days	Slowing	Second markdown / bundle candidate	Bundle with fast movers or step price again.
91-180 days	Aged	Outlet, off-price, employee sale	Move off the main floor; push through a secondary channel.
180+ days	At risk of dead stock	Liquidator, donation, write-off	Get it off the books — carrying cost now exceeds likely recovery.

The real carrying cost of holding excess inventory

Carrying cost isn't just the shelf space — it's capital tied up that can't be reinvested, storage and insurance, shrinkage risk, and the growing chance the stock becomes obsolete before it sells. Most retailers estimate it as an annual percentage of inventory value at cost, commonly in the 15-30% range depending on category and how capital-constrained the business is.

That percentage compounds quietly. A position that looks like a minor markdown decision at 60 days can be actively losing money every month it sits at 180 days, even before accounting for the deeper discount it will eventually need to clear.

The disposal ladder — cash recovered decreases at every rung

Rung	Channel	Cash recovered	Notes
1	Scheduled markdown cadence	Highest	Still full retail channel; margin erodes but no channel cost.
2	Bundling with fast sellers	High	Moves units without a standalone price cut on the label.
3	Employee / loyalty sale	Medium-high	Narrow audience, but near-retail recovery and goodwill.
4	Outlet / off-price channel	Medium	Wholesale-like price, but a real cash sale and floor space back.
5	Jobber / liquidator	Low-medium	Fast, bulk exit at a steep discount to cost.
6	Donation	Low (tax value only)	No cash recovered; deduction plus warehouse space freed.
7	Write-off	None	Accepts the loss; last resort once nothing else moves it.

Each rung recovers less than the one before it. The objective is to exit as high on the ladder as remaining velocity and channel access allow, not to skip straight to liquidation.

Catch it before it's dead stock

Model the markdown cadence that clears aged inventory while it's still sellable, before it drops down the disposal ladder.

Free, no sign-up, with CSV export and a shareable link. Pro ($29/mo) saves named season plans, imports inventory CSVs, and prints a decision memo.

Open the markdown planner

Keep planning

When to mark down inventory
The velocity signals that should trigger a break before stock ages out.
Sell-through and markdowns
How weekly sell-through and weeks of supply set the markdown clock.
Inventory turnover calculator
See how aged, slow-moving stock drags down overall turn.
Retail markdown planning
Build a cadence that keeps stock from reaching dead-stock status.

Answers