Dead stock: how much is it really costing your SME?

You probably know it: part of your warehouse isn’t moving. Products sitting there for months, sometimes years. You notice them during inventory counts, think “we should deal with that,” then daily operations take over.

This dead stock has a price tag. And it’s much higher than most SME owners realize.

What is dead stock?

Dead stock — also called dormant or obsolete inventory — refers to items with no movement for 6+ months. In a typical Swiss SME, dead stock represents 15-25% of total inventory value. For CHF 1M in stock, that’s CHF 150-250K tied up with no return.

The 5 hidden costs

Locked capital. With 5-8% cost of capital, CHF 200K in dead stock costs CHF 10-16K/year in opportunity cost alone.

Warehousing. At CHF 80-150/m²/year in Western Switzerland, 50m² of dead stock costs CHF 4-7.5K/year just to store.

Depreciation. Items lose 15-30% of value per year of excess storage.

Insurance and taxes. Dead stock inflates your insured and taxable inventory value.

Management overhead. Your teams spend hours on items generating zero revenue.

The CHF 25,000 rule

Every CHF 100,000 in dead stock costs approximately CHF 25,000 per year. This is consistent with supply chain benchmarks and what we observe in Swiss SMEs.

Doing nothing isn’t free. It costs 25% of the stock’s value annually.

How to identify dead stock

Export your product list from your ERP. For each item, you need: quantity in stock, unit value, and date of last outbound movement.

Classify into three categories: dead (no movement 12+ months), dormant (6-12 months), and active (regular movement). Calculate the value of each. The total of dead + dormant is your recoverable capital.

What to do

Dead stock: liquidate, return to supplier, donate (tax-deductible in Switzerland), or write off.

Dormant stock: targeted promotions, bundling with popular items, redistribution to other channels.

Active stock: implement reliable forecasts and calibrated reorder points to prevent new overstock.

Automate this diagnostic

At SwisslogiAI, we use AI to analyze your inventory in depth. In 5 days, our diagnostic identifies dead stock, root causes, and prioritized solutions.