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Reduce dead stock to protect margins and cash flow

Dead stock doesn't always show up as a loss until you write it off, but it's costing you money every day it sits on the shelf. Phocas helps you find it early, act on it and stop it from recurring.
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Reduce dead stock to protect margins and cash flow

Hidden inventory is costing you

Without real-time visibility into SKU-level data, dead stock is identified too late – and your options to recover the cost are already gone.

26%

of distributors don't know their dead stock percentage at all

26% of distributors don't know their dead stock percentage at all
63%

believe they are losing sales due to not having the right stock available

63% believe they are losing sales due to not having the right stock available
18%

don't know their inventory days of supply – a basic metric for working capital control

18% don't know their inventory days of supply – a basic metric for working capital control
45%

review inventory performance daily, yet many still rely on static spreadsheets

45% review inventory performance daily, yet many still rely on static spreadsheets
Source: Inventory Trends in Wholesale Distribution Report 2026

It pays to get this inventory metric right

With 20 years in wholesale distribution, Page Schrock knows where to start when inventory data feels overwhelming. His answer: dead stock. Get a handle on it and everything else tends to follow.

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It pays to get this inventory metric right

Prevent dead stock before it impacts profitability

Phocas Analytics helps you understand exactly what's happening across your inventory – from every angle. Using live ERP data to spot risk early, evaluate performance at SKU level, and act before slow-moving stock erodes profit.

  • Surface slow movers early: Filter by last sale, stock age and turn rate to find underperforming SKUs before they become write-offs.
  • Segment by risk level: Spot products moving toward dead stock status while you still have cost-effective options to act on. 
  • Calculate the true carrying cost: Understand what it is actually costing you in capital, storage and future discounting pressure. 
  • Test pricing strategies: See the margin impact of discounting on slow movers before applying it. 
  • Track financial impact over time: Measure dead stock as a percentage of total inventory each month. 
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Dead stock benchmarks

According to the Inventory Trends in Wholesale Distribution Report 2026, 46% of distributors cluster between having 2–10% dead stock, making this the realistic operating norm. Yet 12% of them report more than 10% of dead stock. One in five also lack visibility into dead stock.

Response

  • No dead stock
    1%
  • Less than 2% dead stock
    19%
  • 2-5% dead stock
    20%
  • 6-10% dead stock
    26%
  • 11-15%
    9%
  • More than 20% dead stock
    3%
  • Don't know
    22%

Evaluation

  • No dead stock
    Very rare. Almost all distributors carry at least some dead stock each year
  • Less than 2% dead stock
    Indicates strong inventory discipline and data-driven product lifecycle management.
  • 2-5% dead stock
    A common and relatively healthy operating range, reflecting manageable levels of stock obsolescence.
  • 6-10% dead stock
    The largest group. At this level, dead stock becomes a cash flow and storage space issue.
  • 11-15%
    Can signal inventory risk and weaker alignment with internal teams and customer preferences.
  • More than 20% dead stock
    Indicates structural inventory management issues.
  • Don't know
    A significant proportion of distributors cannot quantify dead stock, highlighting inventory visibility and measurement gaps.
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Dead stock: a demand planning problem in disguise

Most dead stock doesn't appear overnight – it builds up when purchasing decisions are made on historical data that no longer reflects real demand. When sales forecasts, stock levels and purchasing plans live in separate systems, slow movers go undetected until they're already a write-off. Getting demand planning right is how you stop the problem at the source rather than managing the consequences.

Phocas Budgets & Forecasts connects your sales forecasts, current stock on hand and purchasing data into a single demand plan – so your team can see projected stock levels by supplier, product class or SKU, period by period.

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Dead stock: a demand planning problem in disguise
Customer quote

Customer quote

"Demand planning is critical... weaker planners compensate with excess stock and discounting, while stronger planners achieve both availability and better stock turns." 
— John Sefton, Distribution Expert at Phocas Software.

What to do with slow moving stock

Even with the best planning, some stock will age. The key is having options – and knowing which one applies while you still have time. Here's the sequence most distributors use, in order of margin recovery.

For stock still within return terms, this is the highest-recovery option. It only works if you can see aging inventory early enough to act. Phocas surfaces those SKUs while return windows are still open, not after they've lapsed.

See what's selling, know what to buy

  • View rolling 12-month sales alongside current stock on hand by product and location
  • Calculate months cover instantly to know exactly how long your current stock will last
  • Spot which products, categories or warehouses need attention before stock runs out
  • Automate complex inventory calculations in a few clicks – no spreadsheets needed
  • Give purchasing and finance shared, real-time visibility for confident stock decisions
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See what's selling, know what to buy

Smart inventory management

"Phocas has helped us to analyze stock that isn't moving or is moving slowly, so we can move stock around to make the best use of it. This also helps us ensure our suppliers are stocking the right products for us or to plan our deliveries proportionately."

— Mark Law, IT Director at Hayley Group.

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Smart inventory management

Connected inventory visibility across your business

Reducing dead stock depends on visibility you can trust. Phocas connects to your existing ERP and surfaces aging inventory, slow movers and stock risk in one connected view – giving your purchasing, finance and operations teams the shared picture they need to act.

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Budgets & Forecasts
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Research report | 2026

Inventory trends in wholesale distribution

If products and supply chains are part of your working day – this new trends report is a must read.

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Inventory trends in wholesale distribution

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