How to Clear a Warehouse of Dead Stock

Work out what the space is worth first

Before you value the stock, value the rack. Storage has a real cost per pallet per week, and once you know it you can answer the only question that matters: is this pallet earning its space.

Stock that has not moved in a year at a cost of storage that exceeds its realistic resale value is not an asset. It is a liability that has been sitting in the asset column.

The order of operations

1. 1Count it. Not a full manifest, just pallet counts by rough category. You need this to talk to anybody sensibly.
2. 2Split it into current, ageing and dead. Different stock, different routes, and mixing them destroys the value of the good stuff.
3. 3Move the current stock through your own channels first. It is the only part where you keep the whole margin.
4. 4Get bulk offers on the ageing and dead, but do not accept yet. You need the number as a benchmark, not as a decision.
5. 5Consign one representative pallet and compare the result against the bulk offer.
6. 6Then clear the rest by whichever route won, and dispose of only what genuinely will not sell.

The mistake that costs the most

Sorting everything before you know what it is worth. Sorting is expensive labour and on low value mixed goods it frequently costs more than the uplift it creates. Do the counting, skip the sorting, and let whoever sells it do the sorting out of the sale price.

The second most expensive mistake is holding out for a number the stock will never reach. Every week you wait is another week of storage against goods that are getting older, not more desirable.

Logistics, plainly

• Know who is loading. A collection that turns up with no way to load is a wasted day for both sides.
• Wrap and label by pallet, even roughly. It costs minutes and it is what makes per pallet reporting possible later.
• Photograph each pallet before it leaves. Cheap, and it settles any question about what went.
• Agree who pays for transport before anything moves, not after.

What to do with the genuinely unsellable

Some of it is scrap. Be honest about that pile, but be careful how big you assume it is. Goods that look unsellable in bulk frequently sell perfectly well individually, because the problem was never the goods, it was that nobody could price them.

Anything that cannot sell on its own is worth bundling before it is worth binning. We put slow stock into bundles rather than returning it, which is how the sell through rate stays at 100 percent and why nothing comes back to the consignor.

The realistic timeline

A full warehouse clear is weeks, not days, if you want to be paid properly for it. Anybody promising to clear it all instantly is offering you the skip price. That is a legitimate service, and sometimes exactly what is needed, but it should be a decision rather than a default.