Doing a business is not an easy matter, it is not uncommon for obstacles and obstacles to occur. In the retail industry in particular, the obstacle that is often found is Dead Stock. If the obstacles cannot be overcome, the business will suffer losses.

What is Dead Stock? What are the causes and how to overcome them? Check out a more complete explanation in the following article!

What is Dead Stock?

Dead Stock is a term used to describe the condition of a product that has been stored in a warehouse for too long so that it can no longer be sold, or if it is sold it will not sell well. This is because the product is damaged, defective, obsolete or expired.

Dead Stock conditions generally occur in products that are included in the slow-moving inventory category or products that are not in great demand in the community. However, it is possible that Dead Stock will also occur in products in the fast-moving inventory category.

Causes of Dead Stock

Dead stock does not just happen, there are several factors that cause it. Some of these factors include:

1. The inventory calculation in the warehouse is inaccurate, so that when placing an order for the next inventory, there is excess stock.

2. Excessive product SKUs.

3. Low customer interest, thus affecting the decline in sales.

4. The material quality of the product is indeed not good.

5. Poor storage system.

6. Lack of control over material supply. This usually occurs in conditions where the distributor offers a low price, then the seller buys in large quantities for cost effectiveness. But don’t think long term about product quality.

If this condition continues to occur, it is undeniable that it will have an impact on several parts of your business process, and one thing is certain that you will experience big losses materially. The resulting impact is material, such as increasing holding costs and handling inventory in warehouses to reduced storage space capacity, while costs incurred and used storage space can be allocated for other business needs and development.

Then, how to deal with this condition? There are several ways you can do to overcome it.

1. Lower selling price

This method can be done if the condition of the product is imperfect or defective, but it is not very visible and can still be used. You can also sell them at wholesale prices to customers.

2. Create discount coupons or free gifts

The results of the study show that giving free coupons or gifts can increase one’s psychological satisfaction. A buyer will feel happy and come back to shop at the same place.

3. Selling products through social media and marketplaces.

Social media and marketplaces are one of the most effective platforms for selling products, you can sell them by providing detailed information about the product so that it guarantees more security to customers.

4. Make a return (return the goods to the supplier)

This possibility can be tried, you can negotiate with the supplier regarding product returns. However, of course this is also readjusted to the terms and conditions that have been agreed upon from the start.

5. Donation

If the possibility of returning is difficult, you can make another option to donate it as a gift to someone else.

Seeing the impact that might occur is so great, it would be better to avoid this condition. Fortunately, there are several ways that can be done to prevent businesses from this condition. This method is divided based on the product itself and the support system used. From the product side, ensure that the materials used are of high quality, conduct a survey of whether the product is included in the slow-moving inventory or not, as well as assess customer interest and needs for the product. Meanwhile, from the supporting system, use quality management software. This software will affect the stock taking process which is carried out routinely to be more optimal.

In short, you can make Gudang2go a solution to the Dead Stock problem. Gudang2Go provides storage services with a software management system that is able to accommodate stock taking management, predicting supply, as well as additional picking, packing, shopping services.