R.I.P. Dead Stock
Do you wonder if the dead stock in your store is going to come back to life like a zombie in a horror movie? Well zombies aren’t real but dead stock is a real killer to your bottom line! It’s not helping you control your inventory. Get rid of it. It’s dead. You won’t miss it.
What is dead stock? Collectively, it’s the items that sit on your shelves gathering dust, failing to move in an acceptable period of time. Barring seasonal or similar circumstances, if an item doesn’t sell in 45 to 60 days, it’s dead. Your wholesale distributor will often take it back and provide a credit you can invest in hot sellers.
Shelf space is valuable. You must satisfy customers with a product mix often confined to an area that makes a phone booth look roomy. Here are some tips to keep dead stock out of your store:
- Identify it.
Good back office systems incorporate reports that identify items not sold in a selected period of time like 45 days. Review each item and get to the bottom of why it’s hanging around. Maybe you didn’t sell snow chains in October, but are expecting a large snow storm in early November. Keep the chains.
- Remove it.
Once you find dead stock, eliminate it. As stated previously, there’s a good chance your wholesale distributor will be happy to take it back and offer you a credit.
- Replace it with items that do move.
Using your back office system, identify items that have a good rate of turnover. In addition to stocking more of them, you can experiment with new items since you’ve made more room on your shelves.
It is important to realize that eliminating dead stock is not a one-and-done; like all aspects of inventory control, it’s a continuous process. With the assistance of a back office system you can make the right adjustments again and again, an example of how technology can pay dividends in the form of added profits and additional time . . . maybe to watch a zombie movie or two.
Got any popcorn?