What is Dead Stock?
Dead stock is inventory that has not sold for a long time and is unlikely to sell at its normal price.
Updated
Meaning
English
Dead stock is inventory that has not sold for a long time and is unlikely to sell at its normal price.
Roman Urdu
Dead stock woh maal hai jo kaafi arse se nahi bika aur normal qeemat par bikne ka imkaan kam hai.
Also called non-moving stock, slow-moving stock, obsolete stock, phansa hua maal.
Example
A mobile accessories shop finds 140 phone covers for models no longer sold, untouched for 180 days. At cost they hold 42,000 rupees of cash. The owner bundles them as free gifts with screen protectors to clear the shelf.
How it works
Dead stock costs more than it seems: it holds cash, takes shelf space, and often loses value further as fashions, models and seasons change. Most shops have more than they think, because nobody looks at what did not sell.
Review it on a fixed rhythm, for example items with no sale in 60, 90 or 180 days. Then act: return to the supplier if possible, transfer to a branch where it sells, bundle with fast sellers, mark down, or write off. Prevention is better: buy smaller quantities of new or seasonal items until they prove themselves.
In Nafaa
The Nafaa stock report marks dead stock (no sale for a period you choose: 30, 60, 90 or 180 days) and slow-moving stock separately from fast sellers, with the value held in each.
Related terms
- ABC Analysis
ABC analysis sorts products into three groups by their share of sales or profit: A for the few that bring most of it, B for the middle, and C for the many that bring little.
- Inventory Turnover
Inventory turnover is how many times a business sells through its average stock in a period, calculated as cost of goods sold divided by average stock at cost.
- Working Capital
Working capital is the money tied up in running the business day to day: stock plus money owed by customers plus cash, minus what is owed to suppliers.
- Combo Deal
A combo deal is a set of products sold together at one price, usually lower than buying each item separately.