PROFITFALCON Dead Stock Math: What Unmoving Inventory Actually Costs You
Inventory that doesn't move feels like an asset on the balance sheet. Operationally it's a slow leak: capital, storage, and shrinking resale value, compounding monthly.
The three costs of a unit that won't sell
- Capital cost — cash tied up that can't buy inventory that does sell. Price it at what that cash earns elsewhere in your business, not at a savings rate.
- Storage cost — per-unit warehouse or 3PL fees, every month, forever.
- Obsolescence — seasonal relevance and resale value decay. A unit worth 100% of price today clears at 60% in six months and 30% in a year.
dead_flag = weeks_of_cover > 26 (stock ÷ weekly velocity)
The clearance break-even
The question is never "can we sell it at full price eventually" — it's "does waiting beat clearing now." Compare today's clearance recovery against expected full-price sales minus the carry you'll pay while waiting:
wait = (expected_units_sold × full_price) − (months_waiting × monthly_carry × units)
For genuinely dead SKUs — months of cover, no seasonality coming — clear_now wins far more often than it feels like it should. The instinct to protect the original cost basis is sunk-cost accounting; the cash already left.
Make it a monthly reflex
Compute weeks-of-cover per SKU from your inventory and sales exports monthly. Anything crossing the threshold goes on the clearance-or-bundle list before it ages into a write-off. Dead stock caught at month 4 recovers double what it does at month 10.
ProfitFalcon runs this exact math on your store exports — every number verifiable.
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