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    Obsolete Inventory

    Obsolete inventory refers to end-of-life products that a business has identified as lacking customer interest.

    What Is Obsolete Inventory?

    Keeping a pulse on inventory turnover is critical for optimizing sales and ensuring products are generating revenue. Businesses identify obsolete inventory as products sitting on shelves due to low customer demand. These products have reached the end of their life cycle and are likely costing — rather than generating — money.

    Also called dead stock, obsolete inventory can happen for a number of reasons. In some cases, the brand has launched a new version of a product, making the older one less attractive to customers. This is common for electronics such as phones or computers.

    In other cases, shifting consumer trends make the entire category of products less attractive, which is a common occurrence with toys and other children’s products.

    Obsolete inventory can cost a business money in stocking fees, warehousing, and lost sales, so it’s critical for businesses to use an inventory management system to avoid dead stock.

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