What Does Deadstock Mean for Your Online Store?

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Sometimes we’ve got to talk about uncomfortable things. In this article we’re talking about something that happens to nearly every online business owner. It’ll drive you crazy. It’ll sap your money. It might even trip you up in the storeroom.

We’re talking about… deadstock (cue dramatic music).

But don’t dive behind your desk (or sofa) yet – we’ve got all the information you need on deadstock including what deadstock means, how to get rid of it, and what you can do to swerve it in the future.

What Is Deadstock?

What does deadstock mean? There’s some confusion around deadstock meaning that should be cleared up because the word “deadstock” has two uses. This article won’t be talking about unused collectable sneakers that feature in dedicated apps and websites. They’re always easy to sell!

We mean the nightmare of stuff that stubbornly won’t sell after a long period of time, but still costs you money to keep around. Ugh! This type of deadstock includes:

  • seasonal lines
  • products that are out-of-style or end-of-line
  • things are damaged or bad quality
  • things that a million competitive businesses are selling

Deadstock is expensive and annoying. But it doesn’t have to be the end of the world if you unload it and know how to avoid it in the future.

Advice from the Experts

Top Tip: Make sure anything that doesn’t sell isn’t on an automatic reorder with your suppliers. Things like seasonal items are easy to forget about!

The Impact of Deadstock

Deadstock is like your super annoying uncle at Thanksgiving – it rarely brings anything good. It sucks up:

Money – It costs you the expected profit margin, the initial investment to your manufacturer/supplier, and the money you spent marketing. On top of that is the money you didn’t spend on development or products that would sell.

Time – Watching new stock evolve into deadstock is exhausting because it takes up so much headspace. You worry, try a few sales but that doesn’t work, you shift it around, re-strategize, re-photograph and re-market it, do anything that might work. Deadstock robs you of the time to do what you want to do – having fun (and making money) building your business.

Space – Unless they dropship, many online businesses pay for inventory storage and insurance. But to succeed, you need inventory optimization to run efficiently. Deadstock is like a faucet drip – it costs little money every day. Then every week. And over a couple of months, it really adds up.

Employee resources – Whether it’s maintaining and managing ecommerce inventory, negotiating storage rates, or brainstorming and figuring out ways to sell a value-depleting stock, your employees are forced to devote precious resources away from their jobs.

Your state of mind – Whether you’re the kind of person who can’t sleep if something’s out of place, or you step over all the mess on the floor until you trip on it, it’s hard to keep a healthy state of mind when something’s holding your business back.

Advice from the Experts

Top Tip: Buyer/User Personas are a great way to predict how your customers will act. You can check out user persona examples here!

How to Avoid Deadstock

There are strategies you can use to reduce your chances of getting stuck with deadstock in the future.

Get a buy-back clause into your manufacturer/supplier contract if possible. There should already be a clause for poor quality or items not as described, but you might be able to negotiate a further buy-back for goods that don’t sell. There will be T&Cs like time limits and buy-back discounts. Don’t forget to check whether there are existing laws/regulations about this that affect you.

Consider buying less, especially with new products. Consider starting with a bare bones order, or even inventory samples to see how your audience reacts. If you get a clear idea from your supplier about the timeframe for a follow-up order, you can let customers know if the items are super popular.

Find great predictive software. Deadstock can be the result of inaccurate forecasts, so software that gives you excellent and reliable predictions will give you a good chance of selling your stock. The best forecast platforms take everything into consideration including seasons, customer behavior, trends, what’s going on internationally, even legislation and treaties that might impact your sales. It will predict what you’ll need, how much you’ll need and the most cost effective places to source it. In other words, it’ll help you with what to sell online.

Optimize your marketing strategies and sales team. Deadstock can be the result of a marketing strategy that doesn’t hit at the right time, uses the wrong platforms, or doesn’t quite know how to resonate with customers. Likewise, sales reps have to be effective and motivated. When both of these work together, you’re far more likely to sell what you’ve got.

Advice from the Experts

Top Tip: You can always test your new products (or the marketing campaign for the products) on your customers with targeted questions.

What to do with Deadstock

It’s a challenge to sell deadstock, so it’s important to get organized and creative.

First understand that everyone in business makes mistakes. Sometimes we order too much, or the wrong thing, or we overestimate how well we know our customers. Whatever the reason, go easy on yourself. Don’t double-down, don’t torture yourself by refusing to discount and holding on for dear life. See the deadstock for what it is – an unfortunate situation that you have the opportunity to solve and learn from.

The second thing to keep in mind is that it’s all about framing. These items were unwanted by your customers, but they aren’t unwanted to everyone in the whole world. It’s all about figuring who would want your products, and finding the right way to frame the benefits they get if they buy your deadstock.

Deadstock fabrics website featuring Instagram feed of fabrics and blue smiley buttons
Deadstock Fabrics uses framing to find an audience that would appreciate the fabrics.

Here are some of the things you can do (note – the photos below aren’t companies selling deadstock, they’re just examples for inspiration):

Think About Collaborators

Chances are you know friends, creatives, or other online business owners who might want your stock. If you have 500 inflatable pool rings (that have no safety problems) why not contact a chain of hotels, or gyms, or party promoters? If you have tons of fabric or clothes, there will be artists, theaters, or designers that might be desperate for it! If you have seasonal treats and coffee beans, a car dealership might want it for giveaways during a post-seasonal sale.

Repurpose It

Could you alter your products to make them more appealing or useful? Why not ask friends about any suggestions they might have. For example, if you’ve got a bunch of Christmas tree t-shirts customers didn’t want, why not turn them into funny anti-Christmas t-shirts?

Product image on Aliexpress of anti christmas humorous t-shirt
Aliexpress’ t-shirts show how a boring design can be made funny and interesting

Include It As a Gift With Other Purchases

People love free things. Even if it’s not something that they personally like, they can gift it to someone else. As long as your giveaway makes sense, your deadstock could be the thing that gets a customer to convert on buying the non-deadstock items.

Clear It Out at a Crazy Discount

But instead of the old-school “EVERYTHING MUST GO! DEADSTOCK!” way, do it in a slick, online way. Call it a flash sale and advertise it on your website with a pop-up and a count-down timer. This makes both the stock and the sale more exciting!  

Instagram post from the pony jet promoting a sale via countdown and giveaway
The Pony Jet used two strategies in one – a countdown flash sale and free giveaway!

Donate It

Chances are there will be a school or charity who can make use of your deadstock. Whether you choose to quietly donate, or claim a tax rebate, or even make an interesting social media campaign that draws attention to both your business and the charity, it brings a little more good into the world and helps people out. 

Summary

What does deadstock mean for your business? Well, it’s certainly annoying, but luckily not the end of the world – there are ways to get rid of deadstock, and avoid it in future.

Mistakes are annoying and expensive. Deadstock is a costly miscalculation which is why it’s important to be up on what deadstock means and what causes deadstock to avoid it in the future.

And knowing how to unload it if you’re stuck with it will save you time and money. It might even bring you new collaborators and customers!

Most online business owners are more creative than they give themselves credit for. Take the time to figure out who might need your deadstock, get a better idea of what your customers don’t want, and you’ll be rid of this problem in no time.

FAQs

Absolutely – consider selling to a brick-and-mortar shop, or if you’re feeling more adventurous, try a pop-up shop.
It’s a great idea to figure out how much your dead stock costs with an online formula. 
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