Cash flow

Dead stock, and how to spot it while it is still worth something

By the time stock is obviously dead, most of the money you could have recovered is gone. The useful work happens months earlier.

Marcus VolstedCo-founder, Restocio Published 1 September 2026Updated 1 September 20265 min read

Dead stock, and how to spot it while it is still worth something

Dead stock is not a storage problem, it is cash you already spent sitting in a box. Every unit of it was paid for, shipped and duty-cleared with money that is now unavailable for the products that are actually selling. That is the cost, and it is much larger than the shelf space.

Define it for your catalog, not from a textbook

There is no universal cutoff. A product that has not sold in 90 days is dead in fashion and perfectly healthy in spare parts. Pick a definition you can defend, write it down, and apply it the same way every month.

A workable starting point for most importers: stock with more than 180 days of cover at the current sales rate, or no sales at all in 90 days. Cover is the honest measure because it scales with how fast the product moves. Twenty units is a lot of one thing and nothing of another.

Days of cover = units on hand ÷ average units sold per day. Use days the product was actually in stock as the divisor for the sales rate, or a product that sold out will look slower than it is.

The aging bands and what each one is worth

Act by band, because the right move changes as the stock ages and so does the money you can still get back.

Cover	What it means	What to do
90 to 180 days	Slow, not dead	Stop reordering. Nothing else yet
180 to 365 days	Overstocked	Bundle it, feature it, small markdown
Over 365 days	Dead in practice	Deep markdown, clearance, or move it out
No sale in 12 months	Gone	Write it off and stop paying to store it

The band that matters most is the first one, and it is the one nobody looks at. Stock at 120 days of cover is still worth close to full price, and the only action required is to not order more. That is free. Everything further down the table costs you margin.

Where it comes from

Dead stock is almost always the visible end of an ordering habit rather than a demand surprise.

A minimum order quantity you accepted without doing the arithmetic. The supplier wanted 1,000, you needed 300, and the unit price looked good. Seven hundred units of dead stock were created at the moment you placed that order, not later.

Ordering on a calendar instead of a rate. Reordering every quarter regardless of how a product is moving guarantees you will overshoot on anything that is slowing down.

A forecast that never saw the season end. A product bought on autumn sales rates and delivered in January is not really a forecasting failure. The order was placed against demand that no longer existed by the time the boat landed, which makes it a lead-time failure.

Variants. The size or colour that always sells last is where dead stock hides, because the product as a whole looks fine. Check at variant level or you will not see it.

Getting the money back

In descending order of what you recover. Bundle it with something that sells, which protects the headline price. Use it as a free gift over a basket threshold, which buys average order value instead of margin. Discount in steps rather than one deep cut, because the first 10% sometimes clears more than you expect. Then, if none of that works, take the clearance price and stop paying to hold it.

Ask the supplier before you write anything off. Returns against a future order are more common than merchants assume, particularly if you are still buying from them. The worst answer is no.

The number to watch instead

Counting dead stock is a lagging measure. The leading one is how much of your stock value sits above your cover threshold, tracked monthly. If that share is growing while sales are flat, you are creating dead stock right now and will find out about it in six months.

What we do and do not help with

Restocio is built to stop dead stock being created. It sizes orders from the rate a product actually sells at, subtracts what is already on the way so you do not order the same goods twice, and takes minimum order quantities into account when it proposes a number.

It does not clear dead stock you already have. There is no markdown engine, no clearance automation and no pricing recommendation. If your problem is a warehouse full of goods bought two years ago, we help you avoid doing it again, which is honest but not much comfort. Use the aging bands above and work through them by hand.

Common questions

What counts as dead stock?

There is no universal rule, so set one you can defend. A common definition for importers is stock with more than 180 days of cover at the current sales rate, or no sales at all in 90 days. Judge it in days of cover rather than units, because twenty units is a lot of one product and nothing of another.

How do I calculate days of cover?

Divide units on hand by average units sold per day. Use days the product was actually in stock as the divisor when working out the sales rate, otherwise a product that kept selling out will look slower than it really is.

Should I discount dead stock straight away?

Not as a first move. Bundling it with a product that sells, or using it as a gift over a basket threshold, recovers more than a markdown does. Discount in steps rather than one deep cut, and ask the supplier about a return against a future order before writing anything off.

What causes dead stock most often?

Accepting a minimum order quantity larger than you needed, reordering on a calendar rather than on a sales rate, and ordering against demand that has gone by the time a long shipment lands. All three are ordering habits rather than demand surprises.

Why does dead stock hide at variant level?

A product can look healthy in total while one size or colour never moves. If you only review at product level, that variant keeps getting reordered inside every replenishment. Check cover per variant.

Marcus Volsted

Co-founder, Restocio

Marcus co-founded Restocio and works on it daily with a Swedish importer who plans their purchasing in it every working day. Most of the examples on this blog come from that store's real ordering decisions rather than from a textbook. Why we are building it.