What to Do With Stock That Isn't Selling

There is a version of this in every product business. A pallet in the corner of the warehouse. A shelf in the spare room. Twelve of something in a colour that made complete sense at the time.

Mine was a colourway at Incy I was absolutely certain about. I ordered far too many. It sat there for over a year while I walked past it and felt slightly sick every time.

The stock is not really the problem. Not deciding is the problem.

What should you do with stock that isn't selling?

Decide inside 90 days. First work out whether nobody wants it or nobody has seen it, because those need opposite fixes. Then pick one exit and commit to it. Sell it better, sell it somewhere else, sell it cheaper, or write it off.

Most founders do none of those. They leave it there and hope. Hoping has a monthly cost.

Work out what the stock is actually costing you

Before you decide anything, get the number in front of you. Count the units, multiply by what each one landed at, and write it down. That is cash you have already spent that is currently doing nothing for you.

Then add the cost of keeping it. Storage, insurance, handling, and the interest or opportunity cost on the money tied up in it. Carrying cost is usually quoted at somewhere between 20 and 30 per cent of the stock's value a year. Shopify's worked example for a clothing retailer came out at 26 per cent.

So, illustratively, $12,000 of stock sitting for a year costs you roughly $3,000 to keep not selling. Two years of that and you would have been better off giving it all away on day one.

The number that actually stings is the third one. That same cash could be your next drop, your ad budget, or the sample round for the product people keep asking you for. Stock that isn't moving is not neutral. It is quietly eating your cash flow.

Is it a demand problem or a visibility problem?

This is the question almost everyone skips, and it is the one that saves you the most money.

Open your analytics and look at product page views for the last 90 days. If a product has had a couple of hundred views and no sales, that is a demand problem. If it has had eleven views, it has not failed. It is hidden.

Then go and look at the product honestly. Where does it sit on your collection page, eleventh from the top? Has it ever been in an email? Is there one photo of it, on a white background, shot three years ago?

At Incy we had products that did nothing at all until we reshot them in a real room instead of on white. Same product, same price, same page. The photo was the whole problem.

Our slowest mover at Good Goods right now is the Icon Statement Necklace at $1,599. It is not slow because it is too expensive. It is slow because a $1,599 necklace needs a story, and I had not told it properly. That is a marketing job, not a discount.

Discounting a product nobody has seen does not fix anything. It just means fewer people don't see it, at a lower price.

Seven things to try before you discount

Give it 30 days of genuine effort first. In order of cheapest to hardest:

1. 1Reshoot it. On a person, in a room, in use. One good photo changes a product's life more often than a price change does.
2. 2Rewrite the description. Most slow sellers are described, not sold.
3. 3Move it to the top of the collection page for a fortnight and see what happens.
4. 4Email the people who bought the thing it goes with. The segment matters more than the offer.
5. 5Bundle it with your best seller at a small saving. Let the bestseller do the selling.
6. 6Make it the gift with purchase over a spend threshold. Your public price list stays intact, average order value goes up, and the stock moves.
7. 7Offer it to your stockists. What is stale on your site can be new to their customers.

Two of those are basically free. Rewriting a product description costs you an hour, and getting into stockists moves volume you were never going to shift one unit at a time. Most of the stock I have written off over the years would have moved with one of these. I was too embarrassed by it to try.

When to discount, and how deep

If it has been seen and it still isn't selling, discount it. Once. Properly.

The slow bleed is what kills you. Ten per cent, then twenty at the end of the month, then forty in the sale. All you have done is teach your customers to wait, and you still have the stock.

Pick the number that will actually clear it, run it in a defined window, and be done. A 40 per cent sale that empties the shelf beats a 10 per cent one that empties nothing.

Your floor is landed cost plus what it costs you to pick, pack and ship it. Anything above that line is cash back in the business. Below it you are paying someone to take it away, which is occasionally still the right call, but make that decision with your eyes open. Know your real margin before you set the number.

And if your brand cannot be seen discounting, then don't be seen doing it.

How to clear stock without a public sale

• A private sale to your email list only. One email, 48 hours, no site-wide banner.
• A sample sale. A market stall, a pop up, someone's showroom. Cash on the day and no shipping.
• Wholesale it, even at a price you don't love. It is out, it is paid for, and it is in front of new customers.
• A bulk buyer. Corporate gifting, hampers, hotels, stylists. One phone call can clear a pallet.
• Creators. Sending 30 units to the right people is marketing spend, not a loss. Book it that way in your head and it stops feeling like failure.
• Donation. Give what is left to a charity that can use it and ask your accountant what you can claim.

When to write it off, and how that works in Australia

If it has been reshot, rewritten, emailed, bundled and marked down and it still hasn't moved in 90 days, it is dead. That is not a failure of effort. That is information.

Here is the part founders leave money on. At the end of the income year you value your trading stock, and the ATO lets you choose between cost, market selling value and replacement value, item by item. You can take the lowest, and market selling value can absolutely be below what you paid. Stock that has genuinely become obsolete can be valued lower again under the ATO's obsolescence rules. If your total stock value has changed by $5,000 or less across the year, you may not need a full stocktake at all.

I am not your accountant and this is not tax advice. Take the box in the corner to yours before year end, because most people never mention it.

One more thing about writing it off. The loss did not happen on the day you wrote it off. It happened on the day you ordered it. Writing it off just tells the truth about a decision you already made.

How to stop buying stock that doesn't sell

The real fix is upstream, and it is boring.

Order less, more often. Two smaller runs beat one big one, even at a worse unit price, because the second run is informed by the first. How much you order for a first run is the single most expensive decision an early product business makes, and the true landed cost per unit needs to be on the table before you commit, not after.

If the factory minimum is what is pushing you into buying a colour you are unsure about, push back on the minimum instead of buying the colour. There are more levers on an MOQ than most founders realise.

Test before you commit. A pre-order, a waitlist, one colour first. Let people vote with money before you make it in five colours.

And cap yourself. At Good Goods we run 20 units a style. Selling out and remaking is a far better problem than a warehouse.

I got this wrong for years. I was not buying stock, I was buying my own conviction. Conviction is the most expensive thing in a product business.

So go and count it this week. Write down what it cost you. Then pick one thing off this page and actually do it by Friday.

The stock is not the problem. The deciding is.