Sell it, give it away, write it off: 6 ways to get money back from dead stock

There are six ways to deal with dead stock: sell it through in your own shop, sell it online, return it to the supplier, sell to a clearance buyer, donate it, and as a last resort, dispose of it. Go through them in that order. The first ones bring back more money but take time. The last ones are quick but return little.

One example throughout: 48 fig-scented candles, bought at €8.50, selling at €19.90. That's €408 tied up, moving about three a month. (How to find items like this: How to spot dead stock.)

1. Sell it through in your own shop

This almost always returns the most: no fees, no shipping. Move it first, then mark it down. At €19.90, after 19 percent German VAT, you keep €16.72. At €13.90 you keep €11.68, still €3.18 above cost.

Often better than a red sticker: a bundle. "Candle, matches and a card for €22" sells very differently in December than a discounted candle in a bargain bin. And avoid a shop covered in "50% off" signs. It sells your full-price lines worse too.

2. Sell it online

Online reaches more people, but you get less per item. For single pieces: Kleinanzeigen in Germany, willhaben in Austria, tutti or Ricardo in Switzerland. For quantities: eBay. If you have loyal Instagram followers, "last few, this week only" is often fastest and free. Food near its best-before date suits Too Good To Go.

Count the effort: photos, questions, post office. For a €12 candle it only pays in bulk. For an €80 ceramic set, it can.

3. Return it to the supplier, or swap it

The one people forget. You usually have no right to it, but many suppliers will swap, especially when you're placing a new order. "I'll take 30 from the new collection. Can we swap last year's 20 candles?" The supplier wants the new order. Expect partial credit or a swap, not full cost.

4. Sell to a clearance buyer

Everything goes at once, one invoice. The price is a small fraction of your cost. If a buyer offers €2 a candle, that's €96 instead of €408. It feels bad, but it's cash in your account and an empty shelf. Worth it for large quantities of durable goods. Get more than one offer.

5. Donate it

Food banks (the Tafeln in Germany and Austria) and foodsharing groups take food. Social retail shops, or innatura in Germany, take non-food. No cash, but you get the space back and skip disposal costs. Donated stock can have VAT consequences, and the rules differ between Germany, Austria and Switzerland. Check with your accountant before donating larger amounts.

6. Dispose of it and write it off

Expired or damaged goods have to go. Record what, how much, when and why, with a photo. Then you can book the loss. Without a record, the stock is simply missing at year end.

Which route fits when

Month 12

1. 1Sell through in shopusually the most
2. 2Sell onlinemedium
3. 3Supplier swapcredit or swap
4. 4Clearance buyerlittle
5. 5Donatespace, no cash
6. 6Disposetax only

For the candles: three weeks by the entrance, then €13.90 and a Christmas bundle. Whatever's left in January goes back to the maker as a swap, or to a clearance buyer.

The real win is the shelf

Waiting also makes it harder. The less choice is left, the slower the rest sells. Researchers built this effect into their end-of-season clearance models and tested them at three major retail chains (Smith & Achabal, 1998). In a small shop it looks like this: three leftover candles in a corner don't look like an offer any more. They look like leftovers.

Where 48 candles stood, you can now put a coffee that sells ten bags a week. That metre then earns more in a month than the candles did all year. So start early. After three months every route is still open. After twelve, you're often down to clearance and donation.

Sources

• Smith, S. A. & Achabal, D. D. (1998): Clearance Pricing and Inventory Policies for Retail Chains. Management Science 44(3).