Dead Stock Percentage Calculator

What is Dead Stock Percentage?

Dead Stock Percentage is the proportion of inventory that has not been sold or used for an extended period, typically 6-12 months or longer. It represents the percentage of stock that is not generating revenue and is tying up capital.

Dead Stock Percentage Calculator

Dead Stock Percentage:

Dead Stock Percentage Calculation

  • Formula: (Dead Stock Value / Total Inventory Value) × 100
  • Example: Total Inventory Value of $100,000, Dead Stock Value of $10,000
    • Dead Stock Percentage = ($10,000 / $100,000) × 100 = 10%

Key Points

  • Dead stock is inventory that hasn't sold or been used in a long time, typically 6-12 months or more
  • A lower dead stock percentage indicates better inventory management
  • The acceptable percentage varies by industry, but generally should be kept as low as possible
  • Dead stock ties up capital and incurs storage costs without generating revenue
  • This metric should be analyzed alongside other inventory metrics like turnover ratio

Why Dead Stock Percentage Matters

  • Indicates efficiency of inventory management and purchasing decisions
  • Helps identify slow-moving or obsolete items in inventory
  • Impacts cash flow and working capital
  • Affects storage costs and warehouse efficiency
  • Can signal issues with product lifecycle management or market demand
  • Influences profitability and return on investment

Strategies to Reduce Dead Stock Percentage

  • Implement better demand forecasting techniques
  • Use inventory management software for real-time tracking and alerts
  • Conduct regular inventory audits to identify slow-moving items early
  • Consider bundling slow-moving items with popular products
  • Offer discounts or promotions to clear out aging inventory
  • Improve product lifecycle management
  • Explore options for returning unsold items to suppliers
  • Donate or liquidate long-standing dead stock
  • Implement a just-in-time (JIT) inventory system where feasible
  • Improve communication between sales, marketing, and inventory management teams