Stock levels
What is slow-moving stock?
Stock that still sells, but so slowly that what you hold would take far too long to sell. There’s no official cut-off. More than a year of cover is a good line to start from, and it’s the one Verity uses.
Slow-moving, dead, or fine?
Two questions sort any product: has it sold lately, and how long would what you hold last at the rate it sells? A made-up example, with cover worked out over the last 90 days:
| Product | In stock | Sold in 90 days | Days of cover | What it is |
|---|---|---|---|---|
| Canvas tote | 60 | 90 | 60 | Fine |
| Wool coat | 40 | 9 | 400 | Slow-moving |
| Silk scarf | 120 | 18 | 600 | Slow-moving |
| Leather belt | 80 | 0 | none | Probably dead |
The coat: 9 sold in 90 days is 0.1 a day, so 40 in stock lasts 400 days. The belt has no cover to work out, because nothing sold. Verity calls that dead stock once it has gone 180 days without a sale, a period you can change.
What should I do about it?
- Stop reordering it. This is the cheap fix, and it’s the first one. It still sells, so it needs nothing but time.
- Let it run down, and watch the cover fall. A product at 400 days with no new stock coming is a smaller problem every week.
- Mark it down only if you need the cash sooner. If you do, start with what isn’t selling at all.
Why a year?
It’s a line to start from, not a rule. A shop with slow, expensive products may be happy with more, and one selling fresh goods should worry long before that. To try one of your own, work out its days of cover.
Want to see it for every product? Take the tour and open the Clearance list on an example shop.