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The Real Cost of Dead Stock: A Formula Every Shopify Seller Needs

Published 2026-09-10 · Seller Tales editorial, published by JoyCraft

Your inventory report says your stock is worth $12,000. Your bank account disagrees. Dead stock — product you bought but nobody bought — is the quiet way stores lose money: the cash is gone, the shelf space is taken, and the number on the report is a fiction until someone actually pays for it.

This guide closes that gap. You’ll get the complete formula for the true cost of dead stock, a worked example with every number labeled as an example, and a manual spreadsheet method to find your own number this afternoon.

Full disclosure: Seller Tales is published by JoyCraft. When our own tools are relevant, we say so in the article.

Full disclosure: Seller Tales is published by JoyCraft — when we recommend our own tools below, we say so.

What dead stock actually costs you

Four costs hide inside unsold inventory:

  1. The cash itself — money you paid the supplier that is not working for you.
  2. Carrying cost — storage, insurance, and (if you borrowed to buy it) interest. A common planning figure used as an example is 15-25% of inventory value per year; your real number depends on your warehouse and financing, so build your own.
  3. Opportunity cost — what that cash could have earned: a new product, a campaign, or simply staying in the bank.
  4. The markdown you eventually take — clearing dead stock almost always means discounting below cost.

The formula

True cost of dead stock = purchase cost
                          + carrying cost (annual rate × months held / 12 × purchase cost)
                          + opportunity cost (your own rate × same period)
                          + eventual markdown loss (purchase cost − clear price)

Worked example (every number labeled as an example):

  • Purchase cost: $3,000 (300 units at $10)
  • Carrying rate: 20% per year, held 12 months → $600
  • Opportunity rate: 10% per year → $300
  • Clear price: $6 per unit → markdown loss: $1,200

Total true cost: $3,000 + $600 + $300 + $1,200 = $5,100 for stock you originally thought of as “$3,000 in inventory.”

How to find your own number (spreadsheet method)

  1. Export your inventory list with purchase cost and quantity on hand.
  2. Mark every SKU with zero sales in the last 90 days as suspect.
  3. For each suspect SKU, apply the formula above with your own carrying and opportunity rates.
  4. Sort by true cost. The top of that list is your real problem, not the biggest quantity.

The 90-day rule

A practical heuristic, not a law: any SKU with no sales in 90 days should trigger a decision — promote it, bundle it, return it (if the supplier allows), or clear it. The decision matters more than the choice; “decide” is the point.

AisleMint · by JoyCraft — if you sell on Shopify, AisleMint is our inventory app for tracking stock across locations so slow movers surface before they become dead stock. That’s our tool, disclosed: it’s optional, and the spreadsheet method above works without it.

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Seller Tales is a publication by JoyCraft. When we link to our own tools, we say so, and some of those links carry tracking parameters.