What is Dead Stock and how do IMS Help in Eliminating Dead Stock?

Having an online business is not all peaches and cream. Sometimes, you get stuck in undesirable situations that hinder business growth. It's not an understatement to say, managing an online business is a bumpy ride but, where there is a will, there is a way.

Astute businessmen take the risk assessment beforehand and think about the solutions in advance. In this article, we will discuss a common issue that online sellers face and see how a good inventory management system helps solve this issue.

What is Dead Stock?

Deadstock refers to the unsold inventory that stays in your warehouse longer than you anticipated and there is a chance that it might not get sold in the future.

Deadstock is bad for a business because it takes up space on the shelves without offering any return on investment. Deadstock affects the whole sales record sheet. However, it's a common problem in trading businesses hence there are many ways to get rid of it.

But first, we need to understand the causes of dead stock.

Why does it happen?

There are multiple causes of dead stock and it depends on business conditions. Some common causes are;

- Miscommunication between warehouse and management teams.

- Inconsistent ordering patterns

- Incorrect business forecasts

- Excess of defective products in the warehouse

- Not paying attention to the current trends and customer demands

How to Get Rid of Dead Stock?

You can free your storage space if the dead stock in a number of ways. Different companies opt for different methods to eliminate unsold stock. Some frequently used practices are,

- Negotiate with your suppliers and try to return the dead stock.

- Give substantial discounts on your unsold items to attract the attention of customers. The offer should be appealing enough to incentivize the customers.

- Your dead stock can be put to better use by donating it to charity.

- Combine your dead stock inventory with related products with higher demand and offer bundle deals.

- Benefit from the online b2b marketplaces that sell excess inventory to other companies.

Role of Inventory Management System in Eliminating Dead Stock

Inventory management systems can make your life much easier by providing real-time inventory control and comprehensive warehouse management. Along with many other problems, inventory management systems have proven their worth in eliminating and managing dead stock.

Here is how inventory management systems play a role in preventing dead stock.

Real-time stock visibility and tracking

Before automation, businessmen have to keep track of the sales and purchases manually. Manual management had shortcomings that make inventory control and management a tedious task, moreover, manual management was often inaccurate and more prone to mistakes. Inventory management systems can provide real-time visibility across multiple online channels as well as geographical locations. Irrespective of the time and place, inventory management systems can generate real-time reports based on actual data. The stock visibility and regular reporting help companies keep records of their warehouse stock and avoid any deadstock condition. The reports state how well different products are doing in the market and you can plan accordingly.

Absolute Control Over Inventory

Inventory management systems provide comprehensive inventory details and complete control over business stocks. All the ins and outs are recorded in the system. You know exactly when and which products are coming in or going out of the warehouse. The inventory management system also provides insights into the bestselling and the most selling products. With all this extensive information in hand, you can easily spot the products that are not doing well and advise strategies to get rid of them.

Real-time Stock Analysis

Inventory management systems manage as well as record the details of business operations. These details are then demonstrated in the form of comprehensive reports that provide an in-depth analysis of all the trading activities, customer buying behavior, market trends, in-demand products, low stock products, and much more. These insights help companies to know their products' performance and avoid any undesirable accumulation of products.

Stock Levels Indication

The stock level indication is a valuable feature in inventory management systems. The systems are designed to identify the different levels of products in the warehouse, like minimum, maximum, and re-order levels. The management software then notifies the user about the stock level and in this way helps maintain an optimal level of products in the storage space. Optimal stock levels prevent dead stocking and hence inventory can be managed efficiently.

Inventory management systems have proven their worth in overcoming almost every business problem. It's just about exploring the true potential of the inventory management systems.