Dead Stock Carrying Cost Calculator
Stock that's been sitting for 90+ days isn't just dead weight — it's actively costing you every month in storage, insurance, and opportunity cost. This estimates what your dead stock is costing you monthly, and what it's cost you so far.
What your result means
The calculator shows what your dead stock costs you every month it sits unsold, and the total it has cost you so far.
That cost doesn't show up as a line on your P&L, which is why it's easy to ignore. It's made up of the cash tied up in the stock, plus storage, insurance, shrinkage and the slow loss of value as products age.
How the dead stock cost formula works
Monthly carrying cost = Dead stock value × Monthly carrying cost rate Total cost to date = Monthly carrying cost × Months sitting
- Dead stock value
- cost value of inventory with no sales in 90+ days
- Monthly carrying cost rate
- carrying cost as a % of inventory value per month (default 2%)
- Months sitting
- how long the stock has gone unsold
To set your own carrying cost rate, add up the yearly cost of each component as a percentage of inventory value, then divide by 12:
- Capital cost: the interest you pay, or the return you give up, on cash tied up in stock
- Storage: warehouse or 3PL fees for the space it takes
- Insurance and shrinkage: cover, damage, theft and loss
- Obsolescence: value lost as products go out of season or out of date
Worked example
Worked exampleExample numbers
These match the calculator's default inputs.
| Input | Value |
|---|---|
| Value of stock unsold 90+ days | $15,000 |
| Monthly carrying cost rate | 2% |
| Months sitting | 6 |
- Monthly cost = $15,000 × 2% = $300 a month
- Cost to date = $300 × 6 = $1,800
How to clear dead stock
- Bundle it with best-sellers. A bundle moves slow units without a deep discount on the hero product. The bundle discount calculator checks the margin.
- Discount it, then stop reordering it. A clearance price that recovers most of the cost usually beats holding it.
- Liquidate or donate. Liquidators pay cents on the dollar, but they free space and cash immediately.
- Find the cause. Dead stock usually comes from over-ordering. Setting reorder points from real sales data prevents the next batch.
The guide to dead stock covers how to spot it in your reports and choose a clearance route.
Common mistakes
- Valuing dead stock at retail price. Use what you paid. Retail value includes margin you'll never earn on stock that doesn't sell.
- Treating carrying cost as zero because storage is "free". Even in your own space, the cash tied up, insurance, damage and ageing still cost money.
- Waiting for full price. Every month you wait adds to the cost, and products usually lose value as they age. The best outcome often comes from clearing early.
- Counting seasonal stock as dead. A product out of season isn't dead if it reliably sells next season. Compare its carrying cost until then with what you'd get by clearing it now.
- Fixing the symptom only. Clearing dead stock frees cash once; changing how you reorder stops it building up again.
FAQ
What counts as dead stock?
Inventory that hasn't sold for a long time and isn't expected to sell at full price. This calculator uses 90 days without a sale as the cutoff, but choose the window that fits your products: seasonal or slow-moving items may need a longer one.
What's a reasonable monthly carrying cost rate?
It depends on your storage, financing and insurance costs and on how quickly the product loses value. The calculator defaults to 2% a month as a placeholder. Build your own figure from those components for a more accurate result.
Should I keep dead stock until it sells?
Usually not. Every month it sits adds carrying cost, and products tend to lose value as they age. Selling below cost now can still beat holding it for another year once carrying costs are counted.