Deadstock - Meaning, Causes, Prevention & Methods to Handle Deadstock

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DEADSTOCK MEANING, CAUSES, PREVENTION AND
REMEDIES
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What is Deadstock?
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The path of retailing has many ups and downs, and
deadstock is the extra load that weighs you down
on the road to success
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Every retailer or distributor has a deadstock
graveyard in their warehouse
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Deadstock is the inventory product that never
gets sold and now occupies the store shelves way
longer than expected
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Products may not reach the customers end due to
several reasons and leave a dent in the expected
sale estimates
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Cash flow killer
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We make money by moving boxes, not by storing
boxes
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The company takes a hit if the quantity of
deadstock is huge and revenues are slowly drained
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Deadstock affects your business in the following
ways
Drop in the sales of a particular product
Excess inventory
Storage and maintenance costs
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Causes of Deadstock
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1
Customers Arent Buying
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There can be many reasons for this to happen
Your competitors are providing a similar
product at a better price
Our products are similar to that in other stores
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2
Drop in Quality
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If customers dont feel that theyre
getting value for money, then they will stop
buying from you
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3
Inaccurate Forecasting
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You stock up a product in bulk and it
goes obsolete as it is no longer in demand
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4
Drop the Ego
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They find a product promising, buy it in bulk and
when it fails to sell itself they just do not
admit the fact that they were wrong
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5
Lack of Communication
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Retailers end up stockpiling inventory that
customers have no interest in
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Prevention of Deadstock
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1
Efficient Inventory Management Software
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Use inventory management software to generate
intelligent reports about products which
generated no sales in the past 12 months
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2
Watch Slow-moving Products or Products About to
Expire
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3
Be Sensible When Buying New Products
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4
Survey Your Customers
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Methods to Handle Deadstock
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1
Return It Before It Piles Up
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2
Make An Offer that Customers Cant Refuse
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3
Clearance Sale
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4
Make a Tempting Combination
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5
Make a Charity Donation
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Conclusion
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Deadstock is the obstacle every retailer has to
overcome. The key to minimising excess inventory
is to play it smart
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