1. The True Cost of Dead Stock: Trapped Working Capital
Dead stock refers to products that sit on retail shelves or in store godowns for over 90 days without selling. For an independent retailer, dead stock is a silent cash drain:
Every ₹10,000 of unsold inventory is ₹10,000 of working capital you cannot use to buy fast-selling goods. In addition, stagnant inventory incurs storage holding costs, risks dust and packaging deterioration, approaches expiry dates, and costs interest if financed via business credit lines.
2. Running a 30-60-90 Day Inventory Aging Audit
To eliminate dead inventory, you must first identify it through an objective aging review rather than guesswork:
- Fast-Moving (0–30 Days): Products that rotate within a month (e.g. milk, bread, cooking oil, top-selling phone cables). Maintain strong supplier relationships and never let these stock out.
- Slow-Moving (31–60 Days): Products with declining weekly sales velocity. Review selling price against local market rates and reposition them from bottom shelves to eye-level counter displays.
- Stagnant / Dead (61–90+ Days): Items with zero sales over the last two months. Mark these immediately for proactive clearance before packaging fades or new models make them obsolete.
3. Four Tactical Clearance Strategies That Actually Work
Holding out for full MRP on dead stock is a common trap. Recovering 70% or 80% of your capital today is far better than holding zero-value expired goods six months from now:
- Bundle with Fast-Movers: Pair a slow-moving item with a popular product at an attractive combo price (e.g., buy 5kg premium Basmati rice and get a slow-moving masala jar for ₹20).
- Weekend Clearance Bin: Place a prominent 'Counter Clearance' bin near the billing checkout with flat 30% or 50% discounts. Impulse buyers will clear your stagnant items within days.
- Distributor Buyback / Exchange: Many FMCG and pharma distributors allow stock return or credit exchange within 60 days of invoice if cartons are untampered.
- Staff Incentive Schemes: Offer counter staff a small incentive (e.g. ₹5 per unit) for recommending slow-moving items to walk-in customers.
4. Preventing Dead Stock with Minimum Reorder Levels
The best way to eliminate dead stock is to avoid buying it in the first place.
In Karobari, keep track of your inventory using 3 clean product states: 'Selling' (active items), 'Archived' (discontinued products that keep historical bill records intact), and 'Not for Sale' (reserved or seasonal goods). Set minimum stock alerts so you only reorder when your shelf count drops below your proven sales velocity.
Frequently Asked Questions
How long does an item have to sit on the shelf to be considered dead stock?
In grocery and FMCG, any item unsold past 45–60 days is stagnant. In apparel, electronics, and hardware, products unsold after 90 days are classified as dead stock and should be liquidated.
Should I sell dead stock at a loss or keep waiting for full MRP?
Sell it at cost or a slight loss immediately. Cash in your bank account can be reinvested in fast-moving items that generate 15% profit multiple times a year, quickly recovering any clearance shortfall.
How does Karobari help identify slow-moving products?
Karobari tracks sales timestamps on every bill, allowing you to review sales reports and identify products that haven't moved in 30, 60, or 90 days.
Free Up Trapped Cash in Your Store Inventory
Track stock in real-time, set low-stock thresholds, and manage products on phone or PC with zero subscription paywalls.