It’s that time that everyone dreads. 

You’re running out of room for your clothes, so you have to finally tackle that closet that you’ve been putting off for so long.

You don’t realize just how many clothes you have until you try to clean out the closet, as your collection just builds and builds over the years.

Whether it’s back-to-school shopping, new work clothes, holiday gifts, or a change in wardrobe due to styles or sizes, the new clothes get put into the closet, without the old ones coming out.

Wash. Rinse. Repeat.

But how many of those outfits do you actually wear? If you’re honest, there’s a good chance that the vast majority of them are just taking up space.

Sound familiar to your job?

Managing your inventory can be a lot like managing the clothing in your closet. You focus on big items – the A and B items that move the most – the same way you worry about the articles of clothing that you wear most often or have the most value to you – sentimental or otherwise.

But just like those outdated shirts take up the room in your closet, those low-selling SKUs take up the room in your inventory.

Why do we have so much dead stock?

When cleaning out your closet, you may realize that you have a ton of extra clothes for various reasons:

• You got a great deal

• Holiday gifts

• “Maybe I’ll use it one day!”

It’s not really different with your SKUs, is it? 

• You got a great deal

• You carry the SKU for a specific season of the year

• “Maybe I’ll sell it one day!”

You have so many SKUs – the majority of them low-selling – that it makes managing your inventory hard. That’s not to mention the fact that your buyers are so focused on those high-selling items, that they don’t have the time to manage the low-selling SKUs appropriately, which causes them to make up the vast majority of your dead stock.

In a review of wholesalers across North America, we found that 85% of stocked SKUs sell less than 10 times or less per year.

That’s a lot of SKUs – or stuff – that’s not being managed as well as it should be.

What can we do?

As much as you want to think that you’ll re-wear your letterman’s jacket that you’ve had since high school (those were the glory days!), the chances are that the jacket and other clothes that you haven’t worn in at least a year won’t be missed.

Cleaning out your closet by addressing the clothing that you haven’t worn in a year so that you can focus on the integral (and new) pieces of your wardrobe really isn’t that much different than addressing the low-selling SKUs over the last 12 months that you have that are causing your dead stock and loss of profits.

Here are a few questions that you can ask yourself when considering necessary changes you need to make to managing your inventory:

• How frequently do you review all of your SKUs to determine which ones to mark as stock or non-stock?

• How frequently do you review the mins in your purchasing system?

• Have you done an analysis on what causes your dead stock?

• Do you know how many SKUs you stock with fewer than 10 sales in the last 12 months?

Another way you can help to reduce your deadstock is by checking out our patent-pending digital technology, Thermostock®. 

With Thermostock, you’re able to do what your ERP system can’t do – identify and take control of those low-selling SKUs and prevent up to 90 percent of your dead stock.

Thermostock analyzes the recent sales of all of your stocked SKUs, marking those that haven’t sold in 12 months as nonstock, ensuring that your non-selling SKUs are not purchased, which prevents dead stock.

Using what we like to call inventory policies that we set up with your team during onboarding, Thermostock will analyze the latest inventory characteristics to calculate the optimal Min/Max levels, and will send those recommendations to your ERP system – all without needing to implement a new, costly system so that your buyers can keep doing what they are doing without having a new purchasing system to learn.

Thermostock will also recommend a monthly rebalance of overstocked low-volume items to other locations that are still selling those items to lower the COGS and prevent unnecessary inventory purchases. 

Preparing today for the benefits for tomorrow

By biting the proverbial bullet and addressing the accumulation of clothing that you have in your closet, you can declutter your closet to focus on the key pieces of clothing you wear on a day-to-day basis or on a night out. You’ll know exactly what you have, what fits, and be able to identify areas where your wardrobe may be lacking.

By addressing your low-selling SKUs, you’re actively addressing your dead stock and reducing those lost sales, allowing you to finally gain full control of your inventory.

About Thrive Technologies

Thrive Technologies is committed to solving supply chain planning issues for inventory-intensive companies without requiring expensive risky software implementations. Thrive has developed patent-pending technologies that analyze billions of rows of inventory data and have reduced dead stock by 43.5% in 4 months. Thrive’s inventory solutions are live within days, integrate closely with clients’ ERP systems, and provide unprecedented agility in managing unpredictability and change in demand and supply chains.

For more information, please visit Thrive Technologies at www.thrivetech.com or follow them on LinkedIn, Facebook or Twitter.