What Is Dead Stock?
Dead stock is inventory that's still physically present but hasn't sold in a meaningful amount of time — the opposite problem from stock loss, and just as costly.
Direct answer
Dead stock is inventory that's still physically present but hasn't sold in a meaningful amount of time. Unlike stock loss, nothing has gone missing — the problem is the opposite: it's still sitting there, and the cash spent buying it is sitting there with it.
Dead stock vs. stock loss
These are opposite problems that get confused because both show up as "something's wrong with my stock." Stock loss means inventory disappeared without a sale. Dead stock means inventory is exactly where you left it — it just isn't moving.
How unsold stock ties up cash
Every cedi spent on stock that isn't selling is a cedi that isn't available for anything else — restocking items that do sell, covering rent, or simply sitting in the bank. This is the same mechanism explained more fully on Working Capital and Inventory: dead stock is one of the clearest ways a business can be "profitable on paper" while genuinely short of cash.
How to identify it
Sales history is the practical way to spot this — looking at which products haven't sold over a meaningful stretch of time (a month, a quarter, depending on how fast your category normally moves) surfaces the candidates. There's no universal cutoff for "how long is too long" — it depends heavily on what you sell.
What to consider doing about it
- Discount it — converts tied-up cash back into cash, even at reduced profit. See What a Discount Really Costs You before deciding how much to discount — clearing dead stock is one of the genuinely good reasons to accept a lower margin on a specific sale.
- Bundle it with faster-moving items
- Stop reordering it — the simplest fix, and often the one that's overlooked
- Write it off where the item has genuinely lost its sale value (damaged, expired, out of season)