The quick answer
Slow-moving stock sells less often than expected. Dead stock has no meaningful movement over the period you define. The right review period depends on the product, season and replenishment pattern; a quiet week alone does not prove that an item is dead.
Use dated sales and purchase evidence and inspect the physical goods. Decide whether to improve display, reduce purchasing, negotiate a return or make a controlled markdown. Do not hide unusable stock among ordinary saleable quantities.
Before you begin
- Item-level stock quantities and recent sales history.
- Purchase dates, supported cost records and any batch/expiry information.
- Seasonality, supplier return terms and available shelf/storage space.
See how the pieces connect
Movement
See what actually sold over the chosen period.
Age
Check how long the remaining stock has been held.
Value
Estimate cash and space tied up.
Decision
Choose and measure a practical action.
Work through the steps
Choose a meaningful review period
Use enough history for the product’s normal sales cycle. Separate seasonal items and newly introduced products. Record the criteria so staff do not label stock “dead” from personal preference.
Compare quantity with movement
Review stock remaining, units sold and the last sale date. Check whether missing sales or an incorrect SKU make the item appear inactive. Verify the item physically before deciding it is unsold.
Assess age and usability
Inspect condition, expiry and any held or recalled status. Old stock is not always unusable, but restricted or expired goods need their controlled treatment. Do not offer an unsafe product through a clearance sale.
Estimate the cost of holding
Use a supported cost basis, not merely the retail sticker value. Consider storage, shelf space and cash tied up. A markdown can recover cash while still reducing margin, so calculate the effect.
Choose one action with a target
Improve display, bundle appropriately, reduce replenishment, seek supplier return or consider a lawful markdown. Specify the quantity and review date. Avoid buying more merely to obtain a supplier discount on an already inactive item.
Record the result
Track units cleared, return adjustments, cash recovered and any write-off. Update purchasing decisions from the outcome. Preserve the original movement trail rather than removing the item from records to hide the problem.
A worked example
Movement and remaining value reveal different problems
Illustrative monthly review with simplified costs and no forecast of future demand.
| Item | Units sold | Stock left | Cost tied up |
|---|---|---|---|
| Fast-moving A | 60 | 20 at ₹40 | ₹800 |
| Slow-moving B | 3 | 30 at ₹80 | ₹2,400 |
| No recent movement C | 0 | 12 at ₹150 | ₹1,800 |
Item B ties up more cost than A despite weaker movement. Investigate history and product circumstances before deciding on a return, markdown or write-off.
Common mistakes to avoid
- Treating every short quiet period as dead stock.
- Valuing cash tied up from selling price rather than the supported cost basis.
- Clearing expired or restricted stock through ordinary sale.
- Removing records instead of documenting returns or write-offs.
Questions you might have
Should all slow stock be discounted immediately?
No. Check data quality, seasonality, demand and supplier terms first. Choose an action whose margin and cash effect you understand.
Can a high stock value hide weak sales?
Yes. A large inventory balance does not mean the goods will sell or that the business has spendable cash. Review movement as well as value.
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Sources and further reading
Official rules and portal screens can change. Use the linked authority for the current requirements; the figures in our worked examples are illustrative.